Narrative: Microsoft's Comeback

Each narrative page (like this) has a page describing and evaluating the narrative, followed by all the posts on the site tagged with that narrative. Scroll down beyond the introduction to see the posts.

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    Microsoft FY17 Q2 (December 2016 quarter) Earnings – Microsoft (Jan 26, 2017)

    Cloud was the big theme on Microsoft’s earnings call once again, with a $14 billion annual run rate and nearly 50% gross margins across its cloud businesses, and a 95% growth rate in the Azure business alone. Surface revenue was down a bit, predictably because the product line wasn’t refreshed as fully as in previous years, but not by much, and it seems commercial sales actually grew (probably a reflection of the long sales cycles in enterprise). The phone business continues to dwindle to nothing (just over $200m in revenue this quarter by my estimate, down 81% year on year), but that’s so small now it barely impacts results. Windows did well overall, with some revenue growth from slightly stronger shipments in the PC market, though the PC market overall was still down overall last quarter. Monetizing its consumer business continues to be one of Microsoft’s biggest challenges – its Office consumer subscribers appear to be plateauing at around 25 million, most of its other consumer apps are offered free, and gaming is performing decently, though overall gaming revenue was down year on year. Overall, the results feed the narrative that Microsoft is undergoing a comeback, though it’s a slow and subtle one from a financial perspective.

    You might also be interested in the Microsoft Q4 2016 deck which is part of the Jackdaw Research Quarterly Decks Service.

    via Microsoft (more on Techmeme)

    The Verge 2016 tech report card: Microsoft – The Verge (Dec 29, 2016)

    This is a good summary of Microsoft’s 2016, which was the year in which a significant turnaround or even a comeback seemed to become plausible. The company made some big advances in key areas, although there was no real advance in first-party tablets or laptops, and it all but killed off its Lumia smartphone business. There’s lots of potential here, but we’ll see in 2017 both whether Microsoft can really turn around its consumer business, and whether it can make its hardware business grow again.

    via The Verge 2016 tech report card: Microsoft – The Verge