Microsoft – MSFT

Microsoft – MSFT

Microsoft – MSFT Jonathan Poland

Microsoft Corporation is a multinational technology company headquartered in Redmond, Washington, United States. It was founded in 1975 by Bill Gates and Paul Allen, and it is best known for its software products such as the Windows operating system and the Microsoft Office suite. Microsoft is one of the largest technology companies in the world, as of March 2023. It employs over 200,000 people worldwide and has a presence in more than 190 countries. Microsoft sells its products through a range of channels, including OEMs, distributors, and resellers, as well as digital marketplaces, online stores, and retail stores and operates through three main segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.

The Productivity and Business Processes segment includes a range of software products such as Microsoft Office, Exchange, SharePoint, Microsoft Teams, Skype for Business,, OneDrive, and LinkedIn. It also offers Dynamics 365, a set of cloud-based and on-premises business solutions for organizations and enterprise divisions. Additionally, this segment provides Office 365 Security and Compliance, Microsoft Viva, and professional services to assist customers in developing, deploying, and managing Microsoft server and desktop solutions.

The Intelligent Cloud segment licenses a variety of software products, including SQL, Windows Servers, Visual Studio, and System Center, along with related Client Access Licenses. It also includes GitHub, a collaboration platform and code hosting service for developers, as well as Nuance, which provides healthcare and enterprise AI solutions. The flagship offering of this segment is Azure, a cloud platform that supports enterprise workloads and provides additional enterprise support, Microsoft consulting, and training and certification on Microsoft products.

The More Personal Computing segment includes licensing of the Windows operating system for original equipment manufacturers (OEMs) and other non-volume licensing, Windows Commercial for volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings. It also includes patent licensing and Windows Internet of Things. In addition, this segment provides a range of devices such as Surface tablets, PCs, PC accessories, gaming and entertainment consoles, and other devices. It also includes Gaming, which encompasses Xbox hardware, content, and services, as well as video games and third-party video game royalties. Finally, this segment includes Search, which consists of Bing and Microsoft advertising.

as of March 7, 2023

Okay, this company is massive and continues to be a leader in the technology sector. That said, it’s a $2 trillion company and how much bigger can the pie get at this point? I’m pretty bearish on the entire market right now (with some minor exceptions) and with the amount of money outpacing the value of capital it’s attached to, Microsoft is going to have a hard time growing at 10% a year. It has plenty of cash along with superb revenue and net income numbers. It would be dumb to bet against the company, even if the next decade followed the early 2000’s. I’m not saying that I think it will, just that anytime a company gets this large, the average shareholder should invest via a proxy like VOO or SPY and not directly.

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