Just a few years ago, Microsoft was seen as a lumbering-technological world.
It was big and still quite profitable, but the company had lost its luster, failed or trailing in the markets for the future like mobile, search, online advertising and cloud computing. Its stock price slowed and increased 3 percent in the decade to the end of 2012.
It's a completely different story today. Microsoft runs neck and neck with Apple for the title of the world's most valuable company, both worth more than $ 850 billion, thanks to a stock price that has risen 30 percent in the last 1
So what happened?
] The company built on its strengths
It's a brief explanation of Microsoft's market growth, and it's a long-term.
The long-term equity response is that Microsoft has kept up better than others during the latest sales of the tech company's shares. Apple investors are worried about a slowdown in iPhone sales. Facebook and Google are facing persistent attacks on their role in distributing false news and conspiracy theories, and the investor's concerns are that their privacy policies can scare users and advertisers.
But the more lasting and important answer is that Microsoft has become a case study of how a once dominant company can build on its strengths and avoid being a prisoner of the past. It has completely embraced cloud computing, left an errant foray in smartphones and returned to its roots as a provider of technology for business customers.
This strategy was outlined by Satya Nadella shortly after he became CEO in 2014. Since then, Microsoft's stock price has almost tripled.
It's a big bet on the cloud and won …
Microsoft's cloud computing path – processing, storage and software delivered as a service over the internet from remote data centers – long and sometimes stop.
Its predecessors to cloud computing dates back to the 1990s, with Microsoft's MSN Internet service and later its Bing search engine. In 2010, four years after Amazon entered the cloud market, Microsoft introduced its shooting service. But it did not offer an offer comparable to Amazon until 2013, analysts say.
Even then, Microsoft's shooting service was a side activity. The Group's center of gravity remains its Windows operating system, governed by the company's wealth and power at the PC end. It changed after Nadella replaced Steven A. Ballmer, who had been CEO of 14 years.
Herr. Nadella made the shooting service a top priority, and the company is now a strong No. 2 to Amazon. Microsoft has almost doubled its share of this market to 13 percent since the end of 2015, according to Synergy Research Group. Amazon's share has remained stable at 33 percent over this range.
Microsoft has also cooled its popular Office apps like Word, Excel and PowerPoint in a Sky 365 Office. This offer is aimed at people who prefer to use software as an internet service and provide Microsoft with a competitive entry to Internet service providers. Apps like Google.
The financial payment from the shift came gradually first but accelerated. In the year ending in June, Microsoft's revenue increased by 15 percent to $ 110 billion, and operating profit increased by 13 percent to $ 35 billion.
"The essence of what Satya Nadella did was the dramatic shift to the sky," said David B. Yoffie, professor of Harvard Business School. "He put Microsoft back into a growth business."
It is perceived that Microsoft is on a high growth track that has increased its rising stock price.
… While Going Out Of Losing Games
When Microsoft took over Nokia's mobile business in 2013, Mr. Ballmer greeted the move as a "bold step into the future." Two years later, Nadella went away from the future and took a $ 7.6 billion load, almost the entire value of the purchase, and tossed 7,800 workers.
Microsoft would not try to compete with smartphone technology leaders, Apple, Google, and Samsung. Instead, Microsoft focused on developing apps and other software for corporate customers.
Microsoft has a successful consumer franchise in its Xbox gaming business. But it's a separate entity, and even if it generates revenue of $ 10 billion, it's still less than 10 percent of the company's total sales.
Microsoft products are mainly about tools – productivity tools, whether people use them at work or at home. And its Azure cloud technology is a service for businesses and a platform for software developers to build applications, a kind of cloud operating system.
Mr. Nadella's major acquisitions have been intended to add its offerings to business users and developers. In 2016, Microsoft LinkedIn, the social network for professionals, bought $ 26.2 billion.
"It's really what comes together of professional cloud and professional network," explained Mr. Nadella at that time.
This year, Microsoft paid $ 7.5 billion for GitHub, an open software platform used by 28 million programmers.
It has opened its technology and culture
Under Mr. Nadella, Microsoft has loosened. Windows would no longer be its center of gravity – or its anchor. Microsoft apps would run not only on Apple's Macintosh software, but also on other operating systems. Open source and free software, once anathema to Microsoft, was embraced as an important tool for modern software development.
Mr. Nadella proclaimed an outgoing mindset. "We must be insensitive in our desire to learn from the outside and bring it to Microsoft," he wrote in his book "Hit Refresh", published last year.
The company's financial performance – and share price – suggests that the Nadella formula works.
"The old, windows-centric view of the world founded innovation," said Michael A. Cusumano, professor of the Massachusetts Institute of Technology's Sloan School of Management. "The company has changed culturally. Microsoft is an exciting place to work again."