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Microsoft Product Teardown

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Microsoft has been a market leader for 40 years. Although once more dominant, Microsoft is still a keystone in the digital and internet economy. We’ve collected research to better explain Microsoft’s past and current power.

Key Metrics: 

  • Market Cap: $710.229B
  • PE Ratio: 74.99
  • EPS: 1.23
  • FY ’17 Revenue: $89.950B
  • YOY Growth: %5
  • Productivity and Business Processes Revenues: $30.444B
  • Intelligent Cloud Revenues: $27.440B
  • More Personal Computing Revenues: $38.773B

Retrieved March 27, 2018 from Yahoo Finance and Facebook 10-K

Leadership:

  • Satya Nadella, CEOExecutive Vice President, Marketing and Consumer Business, and Chief Marketing Officer
  • Jean-Phillippe Courtois,Executive Vice President and President, Microsoft Global Sales, Marketing and Operations
  • Kathleen T. Hogan, Executive Vice President, Human Resources
  • Amy E. Hood, Executive Vice President, Chief Financial Officer
  • Margaret L. Johnson, Executive Vice President, Business Development
  • Bradford L. Smith, President and Chief Legal Officer
  • Christopher C. Capossela,

Essential Reading to Understand Microsoft:

Articles:

Books:

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Customer Revenue Growth

  • The statistic depicts a breakdown of Microsoft’s revenue from 2012 to 2017 according to the business segments reported by the company. Microsoft generated 30.44 billion U.S. dollars in revenue from its productivity and business processes segment in its 2017 financial year.
  • Microsoft’s revenue from 2012 to 2017 financial years, by segment (in billion U.S. dollars)
  • “Innovation across our cloud platforms drove strong results this quarter,” said Satya Nadella, chief executive officer at Microsoft, “Customers are looking to Microsoft and our thriving partner ecosystem to accelerate their own digital transformations and to unlock new opportunity in this era of intelligent cloud and intelligent edge.”
  • Highlights* from fiscal year 2017 included:
    • Commercial cloud annualized revenue run rate** exceeded $18.9 billion.
    • Office Commercial revenue grew 6%, driven by Office 365 commercial revenue growth of 46%.
    • Office Consumer revenue grew 14%, and Office 365 consumer subscribers increased to 27.0 million.
    • Microsoft Dynamics revenue grew 9%, driven by Dynamics 365 revenue growth of 78%.
    • LinkedIn contributed revenue of $2.3 billion.
    • Server products and cloud services revenue grew 13%, driven by Microsoft Azure revenue growth of 99%.
    • Enterprise Services revenue decreased 2%, driven by a decline in revenue from custom support agreements, offset in part by higher revenue from Premier Support Services and Microsoft Consulting Services.
    • Windows original equipment manufacturer licensing (“Windows OEM”) revenue increased 3%.
    • Windows Commercial revenue grew 5%, driven by multi-year agreement revenue.
    • Microsoft Surface revenue decreased 2%, driven by a reduction in volumes sold, offset in part by a higher mix of premium devices.
    • Search advertising revenue, excluding traffic acquisition costs, grew 9%.
    • Gaming revenue decreased slightly, driven by lower Xbox hardware revenue, offset in part by growth in Xbox software and services
    • Productivity and Business Processes: Revenue increased $4.0 billion or 15%, driven by the acquisition of LinkedIn and higher revenue from Office.
    • Intelligent Cloud: Revenue increased $2.4 billion or 10%, primarily due to higher revenue from server products and cloud services.
    • More Personal Computing: Revenue decreased $1.7 billion or 4%, mainly due to lower revenue from Devices, offset in part by higher revenue from Windows and Search advertising.
  • The house that Windows built is no longer leaning on the operating system as its main source of revenue as Microsoft seeks to augment its financial structure by championing its cloud-based opportunities in Office and Azure
  • In its most profitable hay day, the Windows operating system generated roughly $18 billion in revenue for Microsoft, but a mere six years later, it’s showing consecutive quarterly declines. While the quarterly reports for Windows show three-month-long edgings downward, it should be noted that its overall decline has been close to a $4 billion reduction with no evidence to indicate a resurgence anytime soon.
  • Admittedly, the move of focusing on the cloud and away from Windows perhaps wasn’t Microsoft’s first choice and market trends seem to be dictating the company’s area of expertise. As PC sales continue to bottom out, and large businesses are preferring to combine Windows 7 with cloud-based programs and services that increasingly interoperate with mobile devices, the necessity of a new desktop operating system from Microsoft has lessened.
  • Back when Microsoft made the structural and earnings report switch to combine Windows and its hardware efforts that included Windows Phone at the time, we made note that it was segregating what we referred to as its “legacy” offerings or potential loss leaders. At the time, Windows Phone was a known earnings bleeder, the Xbox One was a sunk cost, and just after Microsoft announced the free Windows 10 upgrade, combining all seemed to put a clear punctuation on the area of Microsoft that was not long for this world.
  • Even now, Microsoft is further blurring the lines of where Xbox stands as it shifts focus from pure console sales to more arbitrary usage stats and championing Xbox Live Gold subscriptions
  • Also, Microsoft’s recent play with adding Cortana and Bing into Windows 10 is proving to be a worthwhile investment as its Bing search engine saw a nice bump in market share recently. With advertising revenue for the year coming in at $6 billion, an increase from $4.5 billion previously, Windows could soon be overrun by Bing, and that would be a good thing for the company.
  • One advantage with Microsoft is its diverse revenue streams. While it may come with its own challenges, the vast ecosystem of products and services have more tangible touch points with the customers and the community than other.

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Valuation

  • Valuation topped $600 billion in October 2017
    • Shares of legacy tech titan Microsoft Corp continue to gain on Friday afternoon after a rally this week that brought the tech giant’s market capitalization up to $600 billion for the first time since January 2000.
    • The last time Microsoft was valued more was in March 2000, during the heyday of the dotcom era, when it had a market value of a little above $550 billion, according to Thomson Reuters data
  • Impact of Satya Nadella on valuation
  • Microsoft’s shares have been rising substantially over the last couple of years as the company’s mobile and cloud focus started to pay off and as Office 365 gained traction, but assuming that shares would rise by more than sixty percent through 2020, when we basically are entering 2018 already, seems too ambitious.
  • Microsoft is currently trading at 24.8 times this year’s expected earnings (meaning Microsoft’s FY 2018, which started in July and ends June 2018), which is not a low valuation at all — Microsoft has been trading at substantially lower multiples for many years
  • If you had wondered out loud five years ago whether Microsoft  could be the first public company to reach a $1 trillion valuation, you would have been laughed out of the room. The software giant was worth less than $250 billion back then, hobbled by the lackluster performance of Windows 8, its losing battle in the smartphone market, and fears that cloud computing would render its lucrative software business obsolete.
  • Microsoft sustained positive revenue growth over the decade, with the exception of the 2009 fiscal year. Sales growth rates ranged from 5.4 to 18.2%, with an average rate of 8.9%. The company’s portfolio has evolved over time. Consumer licensing revenues became less important, while phones, tablets and enterprise-facing cloud products grew to contribute more of the total sales.
  • As the company embarked on its cloud journey, many things changed. The Windows maker now looks more cohesive as a company, one with a clear plan to take the enterprise segment in its entirety. Microsoft is on its way to building an enterprise software stack that will be extremely hard for competitors to match.
  • Another element contributing to Microsoft’s valuation is the looming presence of LinkedIn (NYSE:LNKD), the white elephant that might yet turn out to be a cash cow. It purchased the professional network mainly to bolster its position in the CRM market and provide a solid support system for Dynamics 365.

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Hardware

Band

History:

  • Microsoft launches ‘Band’ — a wearable fitness tracker OCTOBER 31, 2014 “Making its debut in the wearable technology market, Microsoft unveils a cloud-based health service gadget – Microsoft Band. It is available nationwide in USA via Microsoft Stores and online at MicrosoftStore.com for $199”
  • The wearable was compatible with Android, iOS and Windows, but lacked many of the features seen on rival devices, and users bemoaned the clunky, uncomfortable design and shonky battery life.
  • Microsoft launches Band 2 fitness tracker with curved OLED touchscreen OCTOBER 6, 2015 “The combination of all these sensors mean the band can also detect things like automatically track things like a golf swing, cycling and a range of other activities. The Band 2 will be available to pre-order from today and will arrive from October 30, priced at $249.”
  • The Microsoft Band 2 arrived almost a year ago to the day, bringing a much-needed redesign, Cortana integration and improved fitness tracking. However, the £199 price made it more expensive than rival devices from the likes of Fitbit and just as costly as fully-fledged smartwatches that offered much more functionality.
  • The Microsoft Band is dead. Microsoft has ended sales of its fitness wearable OCTOBER 3, 2016 “Microsoft gave it two tries, but the company’s wrist-worn Band fitness tracker is seemingly no more. The Band 2 has been removed completely from Microsoft’s online store, signaling that production has ceased”

Adoption:

  • Launched last October, the Microsoft Band was initially available only in the US and only through Microsoft’s website and its retail stores. As a result, the device quickly sold out due to its limited stock
  • But to take full advantage of the Band’s features, like taking notes and checking the weather, you’d would have to have a Windows phone running Cortana, which has a sadly miniscule user base
  • It’s not too often these days we hear about the Microsoft Band in the news, but according to a new report, 30,000 Microsoft Band owners opted in to allow researchers pull sleep data from their Microsoft Health dashboard to show the effects of sleep deprivation.

Future Plans:

  • “We have sold through our existing Band 2 inventory and have no plans to release another Band device this year. We remain committed to supporting our Microsoft Band 2 customers through Microsoft Stores and our customer support channels and will continue to invest in the Microsoft Health platform, which is open to all hardware and apps partners across Windows, iOS, and Android devices.”

Hololens

History:

  • Microsoft’s HoloLens priced at $3,000 for developer edition, shipping Q1 2016 OCTOBER 6, 2015 “”Whether it’s for productivity, health care, design, or entertainment, HoloLens creates experiences that aren’t possible on any other device, or any other platform,” Terry Myerson, executive vice president of Microsoft’s Windows and Devices group said on Tuesday.”
    • The headgear, a fully untethered, battery-operated Windows computer which generates 3D CG objects that appear to exist in the real world, will cost $3,000 for this initial “Developer Edition.”
  • These are the first apps and games for Microsoft’s HoloLens FEBRUARY 29, 2016 “HoloStudio is the first app, and it’s one we got to test during the first unveiling of the device last year. HoloStudio combines gestures, voice, and the HoloLens gaze feature to allow users to create 3D objects. It’s a complex application, but its inclusion in the dev kit shows that Microsoft wants to prove to potential developers that apps and games can be more than just the basics.”
  • Microsoft announces global expansion for HoloLens OCTOBER 12, 2016 “Today, Microsoft Corp. announced that Microsoft HoloLens, the world’s first self-contained holographic computer, is now available for preorder in Australia, France, Germany, Ireland, New Zealand and the United Kingdom, with devices starting to ship in late November.”
  • Mixed Reality momentum continues in the Modern Workplace and Microsoft HoloLens expands to 29 new marketsNOVEMBER 1, 2017 “To address growing demand for mixed reality solutions around the world, we are thrilled to announce that HoloLens will be coming to 29 new markets, bringing the total number of HoloLens markets to 39.”
  • Throughout HoloLens’ short existence, Microsoft has repeatedly emphasized how this product, still a first-generation device, was simply not yet consumer-ready. In these first two years of HoloLens public awareness, Microsoft would only focus on building partnerships and use cases that showcased the business and enterprise applications for this new augmented/mixed reality platform.
  • Sullivan says Microsoft is one of few companies that could develop something like HoloLens. The combination of hardware and software that goes into the device, he said, as well as some of the technical innovations that had to happen, makes for quite the challenge. After building the platform for Windows Mixed Reality, Microsoft turned to partners to manufacture their headsets because of their ability to build and scale these products at a low cost.

Adoption:

Future Plans:

Relevant Acquisitions and Investments:

Simplygon, 3D creation, Undisclosed Terms

Microsoft Lumia

History:

Following section pulled from Microsoft Lumia Wikipedia:

“Microsoft Lumia (previously the Nokia Lumia Series) is a former line of mobile devices that was originally designed and marketed by Nokia and later by Microsoft Mobile. Introduced in November 2011, the line was the result of a long-term partnership between Nokia and Microsoft—as such, Lumia smartphones run on Microsoft software, the Windows Phone operating system; and later the newer Windows 10 Mobile. The Lumia name is derived from the partitive plural form of the Finnish word lumi, meaning “snow”.

On 3 September 2013, Microsoft announced its purchase of Nokia’s mobile device business, with the deal closing on 25 April 2014. As a result, the Lumia line’s maintenance was transferred to Microsoft Mobile. As part of the transition, Microsoft continued to use the Nokia brand on Lumia devices until October 2014, when it began to officially phase out the Nokia name in its promotion and production of smartphones in favor of Microsoft branding. In November 2014, Microsoft announced the first Microsoft (non-Nokia) branded Lumia device, the Lumia 535″

Adoption:

  • Pulled from Microsoft Lumia Wikipedia: Sales decreased sharply after the introduction of Windows 10 in 2015 and Microsoft briefly stopped selling Lumia devices from the Microsoft Store at the end of 2016—by which time sales were estimated to have dropped below one million units—although availability was restored at the beginning of 2017
  • [October 2014] Microsoft sold a record 9.3 million Lumia handsets – considerably more than in the quarter ended June 30 (5.8 million units), and beating the previous record of 8.8 million units from the same period last year (when Nokia was still in charge of the Lumia line)
  • Phone revenue decreased $4.2 billion or 56%, as we sold 13.8 million Microsoft Lumia (“Lumia”) phones and 75.5 million other phones in fiscal year 2016, compared with 36.8 million and 126.8 million sold, respectively, in fiscal year 2015.
  • Previously Microsoft had disclosed that it sold 5.8 million, 4.5 million and 2.3 million Lumias in FY 2016, leaving us with 1.2 million for the final quarter.
  • Microsoft has released its Q4 2016 earnings report, revealing that phone revenue was down 81% compared to the same quarter the year prior. While the company sold 4.5 million Lumia phones in the last quarter of 2015, we didn’t get an exact figure for the same period of 2016. However, by all accounts the number is below 1 million.

Future Plans:

  • “We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family,” Microsoft CEO Satya Nadella says in an email to employees today. “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”
  • There’s one glaring hole in Microsoft’s gadget lineup: a mobile phone. But even though an estimated 1.5 billion-plus smartphones will be sold this year, the company says it’s content to stay on the sidelines unless it has something really different to offer. “We’re not going to come out with another device that someone’s done,”  says marketing chief Mehdi.
  • Anyway, smartphones are yesterday’s news, says HoloLens inventor and in-house futurist Alex Kipman. “The phone is already dead,” he says. “People just haven’t realized.”

Microsoft Surface

History:

  • Microsoft Announces Surface Tablet PC JUNE 18, 2012 “”With Windows 8 we don’t want to leave any seam uncovered; we wanted to give it its own hardware innovation,” Ballmer said. “It’s something new, something different, a whole new family of computing devices from Microsoft.””
    • Microsoft is actually releasing two versions of the device: A thinner and lighter (9.3 mm thick, 1.5-pound) consumer version that runs the Windows RT operating system (a version of Windows 8 that runs on ARM processors), and larger version (13.5 mm thick, 1.9 pounds) running the Windows 8 Pro OS, which is aimed at business users.
  • Microsoft Surface preorders open: $499 for 32GB, $599 inc Touch Cover OCTOBER 16, 2012 “Microsoft’s Surface tablet has shown up for preorder in the US, with the Windows RT slate priced from $499 and set to go on sale on October 26. The listing at Microsoft’s official store gives three Surface RT options, starting with the 32GB model with no cover for the same price as a 16GB new iPad, then rising to $599 for the 32GB version with a black Touch Cover.”
  • Dell to start selling Microsoft’s Surface Pro in new enterprise push SEPTEMBER 8, 2015 “When Microsoft first announced that it was building hardware, it meant that for the first time the software company was competing directly against the OEM partners on which it was heavily dependent. Acer in particular was vocal in its criticism of the move, but we struggle to believe that any of the PC OEMs were happy about Microsoft muscling in on their turf. The new venture suggests that whatever concerns the OEMs may once have had are now water under the bridge.”
  • When Nadella became CEO in February 2014, it wasn’t clear Microsoft should be in the hardware business at all. Fourteen months earlier, the Surface RT tablet had flopped.
  • At the time, the hardware team was preparing two new tablets for a spring release: the Surface Mini and an improved version of the Surface Pro, a category-busting machine that included a keyboard and detachable screen
  • The team killed the Surface Mini because it wasn’t sufficiently different from what was already out there. Instead, they focused on the other tablet, which became the hot-selling Surface Pro 3
  • The Surface Book had a fulcrum hinge designed like a watch band that lets a laptop stay open at any angle, and a screen that detaches to use as a tablet. The Surface Dial, a $100 stand-alone wireless knob that went on sale last fall, lets users do a range of things from turning up the sound to changing colors and zooming in and out of blueprints. The Surface Studio is a high-end all-in-one computer with a massive screen that can fold down into a digital drafting table
  • Microsoft’s Surface Pro with LTE launches on December 1st OCTOBER 31, 2017 “Microsoft first unveiled its Surface Pro with LTE earlier this year, promising a release before the end of 2017. As the year draws to an end, Microsoft now says it plans to launch the Surface Pro with LTE support on December 1st. If that timing sounds familiar, it’s because a Microsoft employee accidentally revealed it during an Ignite session last month.”

Adoption:

Future Plans:

  • The machine, which boots up in seconds and features a new version of Windows, is the latest product to appear under the Surface brand, which already sells a popular line of tablets and an all-in-one desktop. Myerson is betting the new laptop will go a long way toward persuading Mac loyalists to give his company a try. Microsoft is targeting college students it believes are eager for a premium $1,000 laptop that they can use for four years without worrying that it will become obsolete before they graduate.
  • That’s the trajectory we want to continue: how do we make our hardware a ‘stage’ for software? Ideally, we want the hardware to fade into the background, and the software to come to life — and, more importantly, for the user to get into the flow.
  • Microsoft has denied all rumors that it’s planning on shutting down production of its Surface line of convertible laptops, claiming that “it’s so far from the truth,” to be laughable. Calling the rumors “tabloid” gossip, Microsoft corporate VP of devices, Panos Panay, said during an address that Microsoft was committed to its hardware divisions and saw them as a great way to improve other parts of its services.
  • But at the International Consumer Electronics Show (CES) in Las Vegas this year, Microsoft executives tell me that the Surface Pro with LTE is actually the first step towards a new future for the PC: a future where laptops have 20-hour batteries, and where you don’t need a WiFi connection to get online — no matter where you are. Microsoft calls it the “Always Connected PC,” or “ACPC.”

Xbox

History:

Adoption:

  • First generation Xbox sales
  • The new console [Xbox 360] only went into production 69 days before launch, thus Microsoft didn’t have enough to fill demand in Europe and North America. Interestingly, around 10% of total units sold ended up on eBay during the first week of release. Once again Japanese sales were very disappointing for Microsoft, having failed again to make any serious inroads due to the culture favouring Nintendo and Sony.
  • Microsoft Corp. today announced that Xbox 360® has sold over ten million units in the United States, making it the first current generation gaming console to break the ten million mark in the U.S., and contributing to global sales of over 19 million.
  • Xbox 360 sales:
  • The Xbox One X has sold 80,000 units in the UK in its first week of release, according to GamesIndustry.biz. That is not only pretty high for the region, given the PS4’s popularity in Europe, but it’s also a figure that took the PS4 Pro four weeks to hit last year.

Future Plans:

Relevant Acquisitions and Investments

R2 Studios, home-entertainment, undisclosed

  • Microsoft Acquires Startup R2 Studios
    • The move comes as Microsoft has spent much of the last year expanding Xbox from a its roots as a primarily videogame machine to a hub connecting traditional TV with Web video. The Xbox business has struck deals with companies such as Netflix Inc., Comcast Corp. , Time Warner Inc.’s HBO and Google Inc.’s YouTube. Subscribers to its Xbox Live service can watch on-demand TV programming or Web video on TV sets hooked up to Xbox devices.

Kinect

History:

Adoption:

Future Plans:

  • Yet while the Kinect as a standalone product is off the market, its core sensor lives on. Kinect v4–and soon to be, v5–powers Microsoft’s augmented reality Hololens, which Kipman also created.
  • Meanwhile, Kinect’s team of specialists have gone on to build essential Microsoft technologies, including the Cortana voice assistant, the Windows Hello biometric facial ID system, and a context-aware user interface for the future that Microsoft dubs Gaze, Gesture, and Voice (GGV).
  • The Kinect may be done for gamers and researchers, but it’s not disappearing entirely. The truth of development at major corporations is always more nuanced than the fate of any single product. And aside from the fact that key Microsoft technologies like Cortana were built from Kinect, Kinect is still a vital sensor platform in which the company will continue to invest.
  • “We looked at the problem ahead of us. We were using technology more and more. So we said, ‘Look, if we’re spending more and more time with these [technologies], one of two things will occur,’” recounts Kipman. “Either we’re going to spend more time interacting with machines in machine ways, and dealing with what’s behind the screen. Or we’re going to have to teach machines to interact better in our world, the analog universe, and teach them to coexist.” “I choose path two for us, as humans,” he concludes.
  • Next up? Hololens R&D will continue mandating that the Kinect sensor gets even better. I’m told an unannounced V5 version for the Kinect will sip on less than 1.5W at its most active–making it around 50 times more power-efficient than the original Kinect. And with more help from AI–along with oodles of hardware yet to be dreamed up–Microsoft can continue its quest to fill the 100×100 problem. Object haptics. At its most extreme, this is the Star Trek Holodeck. No longer do we manipulate mere photons. We can manipulate matter

Zune Hardware

History:

  • Microsoft launches the Zune! SEPTEMBER 14, 2006 “As expected, Microsoft is busting out the Zune today, and we’ve got the rundown. Not a lot of surprises in the specs department, but they’ve confirmed the basics we’ve known for a while, like WiFi, 30GB of HDD, built-in FM, a 3-inch screen and the basic music, pictures and video playback”
  • Microsoft Zune HD launches in the US SEPTEMBER 15, 2009 “The device, which replaces the original, poorly received Zune, comes in 16GB and 32GB models. It has a touchscreen, wifi internet access and FM radio tuner. The smaller of the two costs $219.99 (£133) and the larger version costs $289.99 (£176), which is cheaper than the comparable Apple iPod Touch.”
  • Zune HD and others officially dead after all, despite denials OCTOBER 3, 2011 “The post makes it clear Microsoft “will no longer be producing Zune players” and that the focus is Windows Phone 7.  The service will remain, and warranties will be honoured, but Zune HD owners now officially have a collectors item”

Adoption:

Microsoft Kin

History:

Adoption:

  • “It was killed abruptly because no one was buying it and there no was no credible reason to believe anyone would,” this person said. Fewer than 10,000 Kins were sold.

Relevant Acquisitions and Investments:

Danger Inc.

  • Microsoft invested two years and about US$1 billion developing the Kin platform, beginning with their acquisition of Danger Incorporated
  • In 2008, Microsoft acquired a start-up, Danger, that had built popular mobile phone software, hoping that technology would revitalize its waning phone software business. But Microsoft stumbled as it took longer than expected to create a new product with the technology. In April, Microsoft finally introduced the fruits of this labor when it unveiled the Kin phones.

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Software

Windows

History:

Adoption:

Future Plans:

  • Our ambition for Windows 10 is to broaden our economic opportunity through three key levers: an original equipment manufacturer (“OEM”) ecosystem that creates exciting new hardware designs for Windows 10; our own commitment to the health and profitability of our first-party premium device portfolio; and monetization opportunities such as services, subscriptions, gaming, and search advertising. Our OEM partners are investing in an extensive portfolio of hardware designs and configurations for Windows 10
  • We are working to create a broad developer opportunity by unifying the Windows installed base on Windows 10, and by enabling universal Windows applications to run across all device targets.
  • We are developing new input and output methods within Windows 10, including speech, pen, gesture, and mixed reality capabilities to power more personal computing experiences. The experiences and tools we build will unlock the creator in everyone and enable seamless teamwork not just in the workplace, but also at school and at home across all the devices people use.
  • Using Windows to develop new categories of devices – both our own and third-party – as a person’s experience with technology becomes more natural, personal, and predictive with multi-sensory breakthroughs in voice, ink, gaze interactions, and augmented reality holograms.
  • Our focus as a company on VR is far more on Windows than it is on Xbox One. We have some headsets launching that we’re very proud of, coming later this year for Windows. It’s called Windows Mixed Reality. We have all the Studios teams working on several titles for those headsets. We’re working with third parties on content for those headsets. But our primary focus is on Windows and PC for mixed reality, for lots of reasons
  • We see the opportunity as far larger on PC, as a company. The customer experience will be better. If this thing was in our family room and you’re trying to move around and hitting your shins on things, it wouldn’t be so good. If there are cords, getting caught up on that wouldn’t be so good. The experience on PC is potentially better.
  • Microsoft is continuing to tweak its Windows 10 patching and updating strategy, and plans to hold off until 2019 before releasing another version of Windows 10 designated as its Long Term Servicing Branch.
  • Windows 10 Roadmap

Relevant Acquisitions and Investments:

Pando Networks, Peer-to-peer protocol, <$11MM

  • Microsoft to deliver Windows 10 updates using peer-to-peer technology
    • The software maker acquired Pando Networks in 2013, the maker of a peer-to-peer file sharing technology that’s similar to BitTorrent. It’s not clear what technology Microsoft is using for its Windows 10 testing, but it’s reasonable to expect it has evolved from the Pando Networks acquisition.

Windows Mobile

History:

Adoption:

Windows Mixed Reality

History:

Adoption:

Future Plans:

Relevant Acquisitions and Investments:

AltspaceVR, Undisclosed Terms

  • AltspaceVR is now part of Microsoft
  • The virtual reality social networking app allows users across headset and web platforms to join 3D chat rooms to play games, watch videos and attend events.
  • “Microsoft is excited to incorporate communications technology into our mixed reality ecosystem. Today’s social experiences can be one sided: text, photos, and videos are posted by a single person, to be consumed by others later,” a Microsoft spokesperson told TechCrunch in a statement. “But AltspaceVR takes social networks, combines them with real-time experiences, and leverages immersive presence to transcend beyond sharing posts to sharing situations. Situations of people, places, and things have deeper meaning and in turn, are more memorable.” https://techcrunch.com/2017/10/03/microsoft-acquires-social-virtual-reality-app-altspacevr/

Office (Productivity)

History:

Following section pulled from Microsoft Office Wikipedia:

Microsoft Office is an office suite of applications, servers, and services developed by Microsoft. It was first announced by Bill Gates on 1 August 1988, at COMDEX in Las Vegas. Initially a marketing term for a bundled set of applications, the first version of Office contained Microsoft Word, Microsoft Excel, and Microsoft PowerPoint. Over the years, Office applications have grown substantially closer with shared features such as a common spell checker, OLE data integration and Visual Basic for Applications scripting language. Microsoft also positions Office as a development platform for line-of-business software under the Office Business Applications brand.

Adoption:

Future Plans:

Relevant Acquisitions and Investments

  • Swiftkey, Mobile Productivity, $250M
  • Mobile Data Labs, mobile productivity, undisclosed
  • VoloMetrix, organizational productivity,
    • Microsoft to acquire VoloMetrix to empower individuals and drive organizational productivity
      • Even small improvements in a person’s day-to-day effectiveness can add up to significant value for an organization and greater employee happiness. Today, most of us don’t have the tools and information to help us make better decisions about our scarcest resource at work: our time. But, similar to how fitness trackers help us understand our health in our personal lives, innovative new solutions are emerging to objectively measure and prioritize our time at work. Giving people access to real data and objective, personalized feedback can lead to a virtuous cycle of improvement for both individuals and their company.
      • The hardest part about this is accessing and making sense of the real behavioral data that would give people these insights. Office 365 and the Office Graph offer a wealth of data and a powerful machine learning platform. By harnessing this data – while maintaining strict privacy controls – customers can create these personalized feedback loops that help people answer questions like: How can I improve my emails to ensure my communications are impactful? Am I spending my time focused on my priorities? Do I have the right people and expertise in my network to accomplish my project?
  • 6Wunderkinder, mobile productivity, rumored $100-200MM
    • Welcome 6Wunderkinder! Microsoft acquires Wunderlist
      • The addition of Wunderlist to the Microsoft product portfolio fits squarely with our ambition to reinvent productivity for a mobile-first, cloud-first world. Building on momentum for Microsoft Office, OneNote and Skype for Business, as well as the recent Sunrise and Acompli acquisitions, it further demonstrates Microsoft’s commitment to delivering market leading mobile apps across the platforms and devices our customers use – for mail, calendaring, messaging, notes and now tasks.
    • Microsoft to shut down Wunderlist in favor of its new app, To-Do
  • Datazen, mobile business intelligence, undisclosed
    • Microsoft Acquires Mobile Business Intelligence Service Datazen
      • Datazen, which launched about three years ago, allows businesses to create mobile dashboards from data in Microsoft Excel, but also from other cloud and enterprise database sources.
    • Microsoft acquires mobile business intelligence leader Datazen
      • Datazen technology and solutions will complement Power BI, our cloud-based business analytics service, rounding out our mobile capabilities for customers who need a mobile BI solution implemented on-premises and optimized for SQL Server. Over time, we plan to integrate Datazen technology with Power BI to give our customers another hybrid bridge for their on-premises investment to the cloud.
  • Sunrise, mobile calendar,
    • Microsoft acquires Sunrise, creator of an innovative calendar app for mobile devices
      • I’m pleased to announce that Microsoft has acquired Sunrise, provider of a next-generation calendar app for iOS and Android. We are making this acquisition because we believe a reinvention in the way people use calendars on mobile devices is long overdue. Our goal is to better help people manage and make the most of their time in a mobile-first, cloud-first world.
  • Acompli, mobile productivity, undisclosed terms
    • Microsoft acquires Acompli, provider of innovative mobile email apps
      • This acquisition is part of our company-wide effort to help people accomplish more with their mobile devices. This year we brought Office to the iPad and the iPhone, and we recently announced that we’re bringing Office to Android devices. These are significant steps in our work to deliver the best productivity experiences across mobile platforms, and we’re continuing to push forward.

Internet Explorer

History:

Adoption:

Microsoft Edge

History:

Adoption:

Future Plans:

Microsoft Dynamics

  • Dynamics business solutions, including Dynamics ERP on-premises, Dynamics CRM on-premises, and Dynamics 365, a set of cloud-based applications across ERP and CRM.
  • Dynamics provides on-premises and cloud-based business solutions for financial management, enterprise resource planning (“ERP”), customer relationship management (“CRM”), supply chain management, and analytics applications for small and medium businesses, large organizations, and divisions of global enterprises. Dynamics revenue is largely driven by the number of information workers licensed and the continued shift to Dynamics 365, a unified set of cloud-based intelligent business applications for enterprises.

History:

Adoption:

Future Plans:

Relevant Acquisitions and Investments:

Linkedin

Adxstudio Inc, CRM solutions, undisclosed

  • Microsoft acquires Adxstudio Inc., Web portal and application lifecycle management solutions provider
    • Packed with compelling features that extend Dynamics CRM to the Web, Adxstudio Web portals are built natively on Dynamics CRM, allowing our customers to easily connect and extend their key sales and customer services business processes online. These portals work with the CRM application easily and naturally for both online and on-premises customers, who can take advantage of this offering right away. Adxstudio portals can also be used along with our Parature Service thanks to native integration with Parature’s rich knowledge management solutions.

FantasySalesTeam, sales, productivity,

  • Microsoft acquires FantasySalesTeam, an innovative sales gamification platform, to help organizations increase productivity
    • They’ve disrupted the old sales incentive model with an original twist that combines gamification with fantasy sports and expertly applies it to a sales setting. Their platform is highly effective at increasing team collaboration, productivity and consequently driving greater results and business growth. Through team-based competition and involvement of non-sales employees (such as managers, service, operations, marketing and finance) employees “draft” teams and become truly invested in each other’s success. Individual and team results become highly visible, driving both competition as well as collaboration and creating positive, impactful cultural change.

FieldOne, CRM,

  • Microsoft acquires FieldOne, global provider of field service management solutions for the enterprise
    • FieldOne is a great fit for Dynamics CRM adding to our extensive customer service capabilities – which includes chat, knowledge management and self-service functionality from Parature which we acquired in January of 2014.  Like Parature, FieldOne is offered to customers as a cloud service. It’s built on Microsoft technology for fast integration, it already works great with other Microsoft productivity offerings like Office 365 and SharePoint, and has cross-platform capabilities meaning it can work on different devices enhancing the mobile experience which is so critically important in field service management. FieldOne was built from the ground up to leverage Dynamics CRM, and this means that our customers can take advantage of its capabilities right away.

Parature, CRM, knowledge base, $100MM

  • Microsoft acquires Parature to add leading customer self-service suite to Microsoft Dynamics CRM
    • As a provider of cloud-based customer service software to midsize and enterprise organizations, Parature has a well-earned reputation for outstanding customer service with 70 million users worldwide and more than 500 well-known brands, including Ask.com, the United States Environmental Protection Agency, IBM, Saba Software Inc., Tagged Inc. and Threadless. The company also received the 2013 Frost & Sullivan Customer Value Enhancement Award for using social media to help organizations deliver outstanding customer service.
    • Parature’s approach to its solutions enables organizations to take advantage of an extendable knowledge base available through self-service portals on the Web and Facebook, support ticketing, mobile customer care on virtually any device the customer chooses to use, social customer support, and chat for both traditional customer service scenarios and proactive sales engagement to create new, revenue-generating opportunities for the business. These capabilities complement the existing Microsoft Dynamics CRM customer-care solution with core strengths in workflow, extensibility and process-driven user experiences that allow contact center agents to do their best work.
  • Microsoft to drop support for Parature customer-service offering by May 2018

Netbreeze, native language analytics and data mining for CRM, social monitoring

  • Microsoft Dynamics Reimagines and Unites the Worlds of Business and IT
    • Microsoft’s vision is to deliver social monitoring and analytics features as an integral part of the user experience and provide these capabilities to all roles and functions in an organization. To help businesses analyze and act on market intelligence from social conversations, including measuring sentiment across a wide array of social channels, Microsoft today announced an initiative to seamlessly embed social monitoring capabilities across Microsoft Dynamics CRM offerings. This effort has been accelerated with the acquisition of Netbreeze GmbH, which delivers cutting-edge native language analytics combined with data mining, transactional and text analysis capabilities.

MarketingPilot, marketing automation, CRM,

  • Microsoft Dynamics CRM Steps Forward in the Marketing Automation Space
    • As part of these industry trends and emerging business opportunities, I am excited to announce that Dynamics CRM has closed on the acquisition of MarketingPilot. MarketingPilot provides Integrated Marketing Management solutions that allow organizations to better understand their customers, manage and streamline marketing operations and create automated and measurable multi-channel marketing campaigns.  This acquisition is a very exciting step forward for us, and will accelerate our ability to better meet the needs of CMO’s through rich business intelligence, and better enable marketers to successfully plan, execute, monitor, and optimize customer interactions across digital, social and traditional channels, and measure ROI.

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Gaming

Xbox Live

History:

  • Xbox Live launched, NOVEMBER 2002 Xbox Live went online in November 2002; it was different from the Dreamcast and PlayStation 2 services in that it required a subscription fee and broadband connection (this was before broadband had fully taken off). The service ended up being quite successful because Microsoft had better servers, easy to work online menus, and great multiplayer games such as the Halo series.
  • We’ve had this service for 15 years and it’s something we’ve always tried to prioritize. The service quality has gotten a lot better.
  • The Xbox Live service comes in two subscription tiers: Silver, which is free, and Gold, which is $60 per year. Silver subscribers can buy games, movies, and TV shows from the Xbox’s digital store. But subscribing at the Gold level gets you some crucial perks, including the ability to play multiplayer games online and a handful of “free” games every month.

Adoption:

  • [May 2006] Xbox Live, surpassing 3 million connected members, continues its commanding leadership position in the online unified gaming and entertainment space. Since launch, nearly 60 percent of Xbox 360 owners have joined the Xbox Live community. In addition, over 90 percent of connected members are downloading content from Xbox Live Marketplace, driving more than 18 million downloads in the first six months.
  • [February 2016] There are 48 million monthly active users of its Xbox Live gaming service, across both the last-generation (but still popular) Xbox 360 console and the newer Xbox One

Future Plans:

  • In the same way that Microsoft Office is shifting away from a boxed product you buy once, Microsoft is maneuvering Xbox Live to be the center of your gaming world, whether you’re gaming on the Xbox One console or on a Windows 10 PC.
  • The company now tracks monthly active users and revenue from software and services, and is looking at opportunities such as further expansion of Xbox Live online usage, eSports and game streaming. “This means fundamentally rethinking how we measure progress in gaming,” Nadella said on a conference call with analysts last month.
  • More fleshed-out game streaming services like the Xbox Game Pass and Sony’s PlayStation Now (and, previously, OnLive) allow gamers to play games simply by streaming them off of their internet connection, without the need for an actual CD, in a similar way to how users listen to music on Spotify or watch TV content and movies on Netflix.

Microsoft Mixer

History:

Adoption:

Streamlabs Live Streaming Report Q2’17 — 53% Growth, $100M+, Twitch & YouTube Crushing It

Future Plans:

  • Mixer aims to differentiate itself by using Faster Than Light (FTL) technology to make the streaming experience nearly instantaneous rather than a usual 10-20 seconds.
  • This technology is meant to bring more cooperative feel to game streaming.
  • Further integration with Window’s 10 and Xbox.

Relevant Acquisitions and Investments:

  • Beam, Live Streaming, undisclosed terms
    • Microsoft acquires Beam interactive livestreaming service
      • Bringing Beam, their award-winning team and their inventive technology into the Xbox family supports our ongoing commitment to make Xbox Live more social and fun. Using “Minecraft” as one example, with Beam you don’t just watch your favorite streamer play, you play along with them. You can give them new challenges and make real-time choices that affect their gameplay, from tool selection to quests to movement; all through simple visual controls. In the highly anticipated “Sea of Thieves,” which is all about emergent adventures in a shared world, you can watch the drama play out between different crews from multiple player perspectives.

Microsoft Studios

History:

Pulled from Microsoft Studios Wikipedia:

Microsoft Studios is the video game production wing for Microsoft, responsible for the development and publishing of games for the Xbox, Xbox 360, Xbox One, Games for Windows, Steam, Windows Store and Windows Phone platforms. They were established in 2002 as Microsoft Game Studios to coincide with the already released Xbox, before being re-branded in 2011. The subsidiary had also been known as Microsoft Game Division and simply Microsoft Games before 2002. Microsoft Studios develops and publishes games in conjunction with first and third party development studios under their publishing label.

Adoption:

Future Plans:

Relevant Acquisitions and Investments:

  • Minecraft
    • Restoring gaming to the forefront at Microsoft required winning over Nadella and the board – initially to get them to agree to acquire cult favorite Minecraft in September 2014 , and more recently to change directors’ mindset about gaming overall, Spencer said. In July 2014, Nadella declared gaming an important market, but one that was not core to Microsoft’s mission.
  • Minecraftedu, Gaming, Education, undisclosed sum
    • Microsoft To Launch “Minecraft Education Edition” For Classrooms This Summer, Following Acquisition Of Learning Game
      • Already, notes Microsoft when detailing the acquisition, over 7,000 classrooms in more than 40 countries worldwide use Minecraft as part of their curriculum today. The launch of its own supported Education Edition could easily increase those numbers.
      • As MinecraftEdu, the company charged for server subscriptions at $25 per month per server instance. (A single classroom server supports already 30 simultaneous users.) In addition, teachers had to buy a one-time Server Software license at a cost of $41. The BBC reports that Microsoft will charge an annual fee of $5 (£3.50) for each teacher and child, though pricing wasn’t mentioned directly in Microsoft’s announcement.
  • Press Play
    • Microsoft has picked up Press Play, maker of Max and the Magic Marker and Tentacles, it was announced amidst all the E3 hubub on Monday. It’s probably mostly for the Danish studio’s mobile mastery, as neither game came to Xbox 360 but both hit Windows Phone.
    • Additionally, we will close Press Play Studios in Denmark, and sunset development on Project Knoxville.
  • Havok, gaming, physics engine, developer tools,
    • Havok to join Microsoft
      • Microsoft’s acquisition of Havok continues our tradition of empowering developers by providing them with the tools to unleash their creativity to the world.   We will continue to innovate for the benefit of development partners. Part of this innovation will include building the most complete cloud service, which we’ve just started to show through games like “Crackdown 3.”

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Music

Groove (Xbox Music, Zune Music)

History:

Adoption:

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Video

Microsoft Movies & TV (Xbox Video, Zune Video)

History:

Adoption:

  • Tough to find adoption on any of the generic movie/TV rental/purchase services.

Future Plans:

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Voice

Cortana

History:

Adoption:

Future Plans:

Relevant Acquisitions and Investments:

  • Tellme Networks
    • The natural language processing capabilities of Cortana are derived from Tellme Networks (bought by Microsoft in 2007
  • Swiftkey, Mobile Productivity, $250MM

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Communication Products

Outlook

History:

Adoption:

Future Plans:

Relevant Acquisitions and Investments:

  • ACOMPLI

    • Acompli was acquired by Microsoft in December 2014
  • Sunrise Calendar
    • On February 4, 2015, Microsoft acquired Sunrise Calendar; on September 13, 2016, Sunrise ceased to operate, and an update was released to Outlook Mobile that contained enhancements to its calendar functions

Hotmail

History:

Adoption:

Relevant Acquisitions and Investments:

  • Hotmail, ~$400M
    • Microsoft buys Hotmail
    • Microsoft acquired Hotmail in 1997 for an estimated $400 million and launched it as MSN Hotmail, later rebranded to Windows Live Hotmail as part of the Windows Live suite of products

Windows Live Messenger

History:

Adoption:

  • Today Microsoft announced that its Messenger service will be discontinued in the first quarter of 2013. Part of that move is the integration of Messenger’s 100 million+ users – that figure confirmed to TNW by Microsoft this morning – into Skype’s network.

Skype

History:

Adoption:

Future Plans:

Relevant Acquisitions and Investments:

  • Skype
  • Event Zero, productivity/communication, undisclosed terms
  • Talko, Mobile Business Communications, undisclosed
    • Microsoft Buys Ray Ozzie’s Communications Startup Talko, Team Will Join Skype
      • Talko launched in September 2014 after years of development, offering a service that aimed to replace your usual conference line with VoIP, cloud-based calls. The app recorded the live conversations, and also offered additional features, like being about to create bookmarks within the conversation, tag users, and even add asynchronously shared voice-based follow ups to the conversation in question.
      • According to Microsoft’s announcement about the acquisition, the Talko technology and the talent joining Skype will be used to help “deliver great new features and capabilities” in both Skype and Skype for Business. Meanwhile, a post on Talko’s website notes that the Talko app and its service will be sunsetted over the next several months, and will be entirely shut down by March 2016. As a part of this process, Talko will allow its current customers to export their past conversations, including voice, text and photos.

Microsoft Teams

History:

Adoption:

Future Plans:

Relevant Acquisitions and Investments:

  • Intentional Software, Team productivity, undisclosed terms
  • Yammer, enterprise social networks, $1.2 billion
    • Microsoft to Acquire Yammer
      • “The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love,” said Steve Ballmer, CEO, Microsoft. “Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services.”
      • Launched in 2008, Yammer now has more than 5 million corporate users, including employees at 85 percent of the Fortune 500. The service allows employees to join a secure, private social network for free and then makes it easy for companies to convert a grassroots movement into companywide strategic initiative.
      • Yammer will continue to develop its standalone service and maintain its commitment to simplicity, innovation and cross-platform experiences. Moving forward, Microsoft plans to accelerate Yammer’s adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.

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Search

Bing

Pulled from Microsoft Bing Wikipedia:

Bing is a web search engine owned and operated by Microsoft. The service has its origins in Microsoft’s previous search engines: MSN Search, Windows Live Search and later Live Search. Bing provides a variety of search services, including web, video, image and map search products.

History:

Adoption:

Future Plans:

  • Intelligent search experiences use AI and machine learning to deliver more relevant search results everywhere you search across Microsoft 365. New experiences include Bing for business private preview, which provides a unified view of personalized, contextual search results from inside and outside your organization.
  • “When we think about the future, search is going to change pretty dramatically,” said van der Kooi, adding, “We are going to collectively define with our customers what the new business models are when people talk to their devices and we go beyond 10 blue links on a page.”
  • The future of Bing is going beyond the search box to a personal, pervasive and predictive experience in which it might not be obvious users are even interacting with the search engine. Consider product search on the Hololens in which users test couches from a product catalog looks in their living rooms, for example.”
  • We also realize mobile experiences are going to dramatically evolve over the next three to five years to the extent that consumer intent won’t be typed in — it may be location-based, it may be understanding what’s on your schedule. The notion of search could move to a more passive approach. We don’t know, so our strategy is we have to try it all … We believe that this multi-pronged approach will be a way to aggregate sufficient mobile supply that is interesting and will provide great sticky experiences for consumers and great experiences for advertisers

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Server Products and Cloud

Azure

History:

Adoption:

  • In fact, 96 percent of Fortune 500 companies have at least one of our cloud offerings, and 90 percent have at least two.
  • According to Synergy Research Group, AWS controls 34 percent of the market while Azure has 12 percent.
  • Forty percent of Azure revenue comes from startups and independent software vendors
  • Today, more than 760,000 developers from 60 countries are using Cognitive Services to add intelligent capabilities to their applications. Additionally, over 240,000 developers have signed up to use the Azure Bot Service which provides developers with everything they need to build and connect intelligent bots. And thousands of customers are already developing intelligent applications with Azure Bot Service and/or LUIS, such as Dixons Carphone, Equadex, Human Interact, Molson Coors, Sabre, UPS, and many more.
  • Azure compute usage more than doubled year-over-year
  • Server products and cloud services revenue grew $2.5 billion or 13%, driven by Azure revenue growth of 99% and server products licensed on-premises revenue growth of 4%
  • During the same period, Bank of America selected Azure for its tech infrastructure modernization and business transformation, including a goal to deliver 80 percent of its workloads in the cloud in the next few years. Also in financial services, TD Bank and Sumitomo Mitsui Banking Corporation are using Azure and its data services to improve customer experiences. And the largest security technology company, Symantec, runs Norton security on Azure to help protect 50 million people, a key part of its hybrid cloud strategy.
  • BP chose Azure to power its proprietary data lake to make better business decisions. Schlumberger’s new DrillPlan digital well construction solution relies on Azure and the Azure Stack, as well as Office 365 and Microsoft Teams. And, Halliburton’s DecisionSpace 365 digitizes the oil field with IoT on Azure. This week, we announced an alliance with PAREXEL, a leading biopharmaceutical services organization, to drive transformation in the life sciences industry powered by Azure technology

Future Plans:

Relevant Acquisitions and Investments:

  • Avere Systems
  • Cycle Computing, Undisclosed terms
    • Microsoft acquires Cycle Computing to accelerate Big Computing in the cloud
      • “As a further step in this direction, I’m pleased to share that we’ve acquired Cycle Computing, a leader in cloud computing orchestration, to help make it easier than ever for customers to use High-Performance Computing (HPC) and other Big Computing capabilities in the cloud. The cloud is quickly changing the world of Big Compute, giving customers the on-demand power and infrastructure necessary to run massive workloads at scale without the overhead. Your compute power is no longer measured or limited by the square footage of your data center.”
  • Cloudyn, undisclosed, Rumored $50-70mm
  • Hexadite, Cybersecurity, $100MM
    • Report: Microsoft to buy security firm Hexadite for $100M as Cloudyn still in progress
      • “If you look at what Hexadite does, there is a connect between it and what Cloudyn is doing on the cloud management and optimisation front.
      • In both cases, the idea is to bring more automation to some of the more regular and recurring tasks of running a connected, cloud-based business. As Microsoft continues to hone its focus in the enterprise market, and on cloud services specifically, it is looking for more products and services to help differentiate itself from others in the field.
      • As more businesses are looking for ways to reduce mundane tasks and grapple with the sheer weight of network traffic and data that they face today, they’ll be looking for more solutions like these.”
  • Deis, Container technologies, undisclosed terms
    • Microsoft to acquire Deis to help companies innovate with containers
      • In addition to their container expertise, the Deis team brings a depth of open source technology experience – furthering Microsoft’s commitments to improve developer productivity and to provide choice and flexibility for our customers everywhere. Members of the Deis team are strong supporters of the open source community – developing tools, contributing code and organizing developer meetups. We expect Deis’ technology to make it even easier for customers to work with our existing container portfolio including Linux and Windows Server Containers, Hyper-V Containers and Azure Container Service, no matter what tools they choose to use.
  • Solair, IoT cloud, Undisclosed Terms
    • Microsoft acquires Italian IoT platform Solair
      • Solair already used Microsoft’s Azure cloud computing platform to offer its services, so it’s no surprise that Microsoft plans to integrate its technology into the Azure IoT Suite. For now, though, it’s unclear what exactly Microsoft’s plans for Solair are beyond the company saying that it is “excited about their technology and talent – and delighted to welcome them to the Microsoft team.”
  • Metanautix, big data, cloud, undisclosed terms
    • Microsoft acquires Metanautix to help customers connect data for business insights
      • With Metanautix technology, IT teams can connect a diversity of their company’s information across private and public clouds, without having to go through the costly and complex process of moving data into a centralized system. The solution can integrate data across traditional data warehouses like SQL Server, Oracle and Teradata; open source NoSQL databases such as MongoDB and Cassandra; as well as business systems like Salesforce.com and wide array of other cloud and on-premises data stores. Key to Metanautix’ approach is making a wide variety of data query-able by SQL, the most widely used data query language – at speed and high scale.
  • Secure Islands, cybersecurity, cloud, office, $77.5MM
    • Microsoft to acquire Secure Islands, a leader in data protection technology
      • Secure Islands’ technology enhances the data protection capabilities available today with Azure Rights Management Service, Microsoft’s cloud-based information protection solution. The company has long been a close Microsoft partner and built its solutions using our rights management technology. Secure Islands will continue to sell its existing solutions and support its customers.
      • After completing this acquisition, we will integrate Secure Islands’ technology into Azure Rights Management Service to provide a flexible architecture able to meet the most rigorous protection and compliance requirements. These new capabilities, combined with the data classification in Windows and Office 365, will provide our customers with the industry’s most comprehensive data protection solution.
  • Adallom, cybersecurity, cloud,
    • Microsoft acquires Adallom to advance identity and security in the cloud
      • I’m pleased to announce today that Microsoft has acquired Adallom, an innovator in cloud security and a leader in helping customers protect their critical assets across cloud applications. This acquisition is the latest example of Microsoft’s commitment to delivering innovative identity and security capabilities to our customers, across both on-premises and multiple clouds.
  • Bluestripe, cloud application mgmt,
  • Revolution Analytics, big data, cloud,
  • Aorato, cybersecurity, cloud, undisclosed
    • Microsoft acquires Aorato to give enterprise customers better defense against digital intruders in a hybrid cloud world
      • Aorato’s sophisticated technology uses machine learning to detect suspicious activity on a company’s network. It understands what normal behavior is and then identifies anomalies, so a company can quickly see suspicious behavior and take appropriate measures to help protect itself. Key to Aorato’s approach is the Organizational Security Graph, a living, continuously-updated view of all of the people and machines accessing an organization’s Windows Server Active Directory (AD). AD is used by most enterprises to store user identities and administer access to critical business applications and systems. Therefore, most of our enterprise customers should be able to easily take advantage of Aorato’s technology. This will complement similar capabilities that we have developed for Azure Active Directory, our cloud-based identity and access management solution.
  • InMage, cloud backup and recovery, undisclosed
    • Microsoft acquires InMage: Better business continuity with Azure
      • Our customers tell us that business continuity – the ability to backup, replicate and quickly recover data and applications in case of a system failure – is incredibly important. After all, revenue, supply chains, customer loyalty, employee productivity and more are on the line. It’s also very complicated and expensive to do. CIOs consistently rank business continuity as a top priority, but often don’t have the budgets or time to do it right.
  • Capptain, app management, undisclosed
    • Microsoft Buys Mobile App Management Platform Capptain To Beef Up Azure
      • Yesterday, Microsoft’s CEO Satya Nadella noted that Azure, the company’s cloud platform, had more work to do get better traction with startups and developers — an area where one of its biggest cloud rivals, Amazon, has done well
      • Today, the company is taking a step to improve that: it has bought Capptain, a startup based out of Paris that provides app developers with analytics and the ability to send push notifications based on customer usage patterns. Capptain will be integrated into Azure, the company says.
  • GreenButton, big data, compute, cloud
    • Big Compute for Microsoft Azure – Announcing the Acquisition of GreenButton
      • To address this critical and growing need, today I’m excited to announce the acquisition of GreenButton. GreenButton is a leading provider of integrated on-demand solutions that allow customers to manage compute-intensive workloads in the cloud. These solutions are known in the industry for their ease of use. Using GreenButton’s solutions, applications can be cloud-enabled quickly without recoding existing software – and without a PhD in computer science. As a result of today’s acquisition, we’ll be working to integrate those solutions with the Microsoft Azure platform, enabling customers to simply and easily solve complex problems, get more from their data and drive their business forward
  • MetricsHub, cloud monitoring,
    • Microsoft Acquires MetricsHub
      • As an innovator in Active Cloud Monitoring, a technology that automates cloud performance management, MetricsHub helps customers more efficiently manage their cloud services at a lower cost.
  • StorSimple, cloud-integrated storage solutions, undisclosed
    • Microsoft Reaches Agreement to Acquire StorSimple
      • StorSimple solutions combine the data management functions of primary storage, backup, archive and disaster recovery with cloud integration, enabling customers to optimize storage costs, data protection and service agility. With its unique cloud snapshot capability, StorSimple automatically protects and rapidly restores production data using public clouds. Large enterprises across many vertical markets, including retail, oil and gas, manufacturing, consumer goods, healthcare, and financial services, have made their first public cloud deployments using StorSimple.
  • PhoneFactor, multi-factor authentication
    • Microsoft Acquires PhoneFactor
      • “The acquisition of PhoneFactor will help Microsoft bring effective and easy-to-use multifactor authentication to our cloud services and on-premises applications,” said Bharat Shah, corporate vice president, Server and Tools Division for Microsoft. “In addition, PhoneFactor’s solutions will help Microsoft customers, partners and developers enhance the security of almost any authentication scenario.”

Visual Studio

History:

Adoption:

FUTURE PLANS:

RELEVANT ACQUISITIONS AND INVESTMENTS:

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3rd Party Applications and Developer Ecosystem

Windows Store

History:

Adoption:

  • There are 669,000 apps for phones, desktops and tablets in the Windows Store
  • She shared with me that the Windows Store has already had more than 6.5 billion visits in just its first year

Relevant Acquisitions and Investments:

  • Xamarin, Developer Tools, $400MM
    • Microsoft Corp. has agreed to acquire Xamarin Inc., a four-year-old San Francisco maker of software development tools, extending the software giant’s reach deeper into devices that don’t run its Windows operating system.
    • The Xamarin acquisition gives Microsoft a stronger presence on devices beyond those that run Windows, including mobile devices, a crucial goal as Microsoft Chief Executive Satya Nadella tries to enhance the company’s relevance to developers who have largely turned their attention to mobile platforms from Apple and Google, a division of Alphabet Inc. https://www.wsj.com/articles/microsoft-agrees-to-acquire-xamarin-inc-1456340494
  • Havok, gaming, physics engine, developer tools,
    • Havok to join Microsoft
      • Microsoft’s acquisition of Havok continues our tradition of empowering developers by providing them with the tools to unleash their creativity to the world.   We will continue to innovate for the benefit of development partners. Part of this innovation will include building the most complete cloud service, which we’ve just started to show through games like “Crackdown 3.”
  • HockeyApp, crash analytics, mobile,
  • SyntaxTree
    • Microsoft acquires SyntaxTree, creator of UnityVS plugin for Visual Studio
      • UnityVS enables Unity developers to take advantage of the productivity of Visual Studio to author, browse and debug the code for their Unity applications. Already today, dozens of the biggest names in game development rely on Visual Studio and the UnityVS plugin.
      • With this acquisition, we have the opportunity to integrate this support for Unity even more deeply into Visual Studio, and to continue to push forward Visual Studio’s support for game developers.  Microsoft will also make the existing UnityVS plugin available for free on our download site shortly.
  • Apiphany, API management, undisclosed
    • Microsoft Acquires Apiphany
      • Today, I’m excited to announce that we have acquired Apiphany—a leading API management delivery platform. While there is nothing new about app extensibility, cloud computing has rapidly accelerated the use cases for extensibility which has increased the value of the APIs. As you might expect, with expansion and increased value, comes additional work to expose APIs reliably, securely and at scale.  Our newly acquired API management services provide businesses of any size the tools they need to expose particular endpoints while selectively gating access to more sensitive data and services.
  • InRelease, app lifecycle management,

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Machine Learning / Artificial Intelligence

Current Offerings:

Future Plans:

  • Microsoft continues to invest in data and AI solutions that help customers convert raw information into insights and intelligent services. The new generation of Azure Machine Learning makes it easy to develop, experiment and deploy AI models on any data, at any scale. The new SQL Server 2017 is a hybrid cloud database for a company’s most important apps, with built-in AI and world-class security.
  • We are infusing AI into all our products, and this last quarter we announced Dynamics 365 AI solutions —part of our focus on business applications that modernize work processes.
  • Microsoft Research continues to make significant advances in AI technologies, infusing them into product experiences like Bing, Cortana, LinkedIn Newsfeed, Skype Translator, Editor and PowerPoint Designer in Office, Relationship Health in Dynamics, HoloLens, and many more. We are uniquely positioned to take this AI capability and democratize it, so that every developer can be an AI developer, and every company can become an AI company. It all starts with having support for the comprehensive data estate spanning Azure Database, Cosmos DB, Data Warehouse and Data Lake, combined with SQL Server. Azure is the cloud with the richest set of ML tools, bot framework and cognitive services, enabling developers to add AI capabilities into their applications. With state-of-the-art GPU and FPGA support, our Azure infrastructure is best in class for AI workloads. I am excited about our road map here and what’s to come.

Generic AI:

Autonomous Cars:

Real-Time Machine learning:

Acquisitions and Investments:

  • Genee, NLP, Productivity, undisclosed terms
    • Microsoft acquisition of Genee to accelerate intelligent experiences in Office 365
      • Genee uses natural language processing and optimized decision-making algorithms so that interacting with a virtual assistant is just like interacting with a human one. For an example of how Genee works, let’s take a look at a common scheduling problem. Say you want to meet a potential customer, Diana, for coffee. Simply send an email to Diana and copy Genee, like you would a personal assistant. Genee understands that you want to “Find a time to meet with Diana for coffee next week” and will streamline the process by emailing her directly with appropriate options that work with your calendar and preferences. Genee will even send out the meeting invite on your behalf – freeing up your time. A coffee meeting scheduled in a snap!
  • Maluuba, NLP, undisclosed terms
    • Microsoft acquires deep learning startup Maluuba; AI pioneer Yoshua Bengio to have advisory role
      • “Maluuba’s vision is to advance toward a more general artificial intelligence by creating literate machines that can think, reason and communicate like humans — a vision exactly in line with ours. Maluuba’s impressive team is addressing some of the fundamental problems in language understanding by modeling some of the innate capabilities of the human brain, from memory and common sense reasoning to curiosity and decision making. I’ve been in the AI research and development field for more than 20 years now, and I’m incredibly excited about the scenarios that this acquisition could make possible in conversational AI.”
  • Magic Wand, NLP, undisclosed
    • Microsoft buys Wand Labs to add more natural language tech to messaging apps and bots
      • The deal is part of Microsoft’s bigger strategy to build out “conversation as a platform,” and the team will join Microsoft’s Bing engineering and platform team to work on intelligent agents and chat bots.
      • Microsoft, hot on the heels of the news that it is buying LinkedIn for $26.2 billion, has announced yet another acquisition, this time in the area of natural language and artificial intelligence: the company has purchased Wand Labs, a startup that develops messaging apps — and specifically technology behind them that lets them act more intelligently (beyond and alongside our own intelligent interactions on them, of course).
  • Equivio

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Third Party Advertising

Bing Ads

Adoption:

  • Search advertising revenue increased $791 million or 15%. Search advertising revenue, excluding traffic acquisition costs, increased 9%, primarily driven by growth in Bing, due to higher revenue per search and search volume.

Future Plans:

  • Bing Ads introduced native ads on MSN.com inventory over a year ago. A pilot for dynamic native ads is now running with a small set of advertisers and publishers. The aim is to build what the company is calling an Intent Network to differentiate it from standard display networks — and more specifically, the expansive Google Display Network
  • Bing Ads executives acknowledge they can’t grow mobile share on the backs of Microsoft’s first-party platforms alone. “We think of it first in terms of partnerships like Apple and think about Bing in those kinds of partnerships for mobile supply opportunities,” said Steve Sirich, general manager, marketing for search advertising. “We will continue to build experiences like the Cortana apps and Bing apps, but the first priority is on building the third-party supply chain and partnerships.”

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