11 ms·

Microsoft is now worth more than Alphabet

209 points by Bhilai 8y ago

Proven 8y ago
Simply speaking they actually make more products people like to use. Google essentially has just one, and it’s based on diminishing user privacy to the maximum extent possible. MS collects user data but so do Ubuntu and CentOS... not to the extent Google and FB do it.
- baud147258 8y ago
  For Google, there's also Android, Gmail, Google Drive and Google docs
  - Alupis 8y ago
    Overwhelming majority of revenue for Google doesn't come from consumer devices and services... but rather, from advertising. Microsoft has tried hard to get into that arena, but it seems nobody can really edge out Google. Of course, most of Google's devices and services funnel data into the advertising system... but they also do have paid services that are pretty popular, GSuite (Google Apps for Business), Google Domains, Google Drive Storage (paid storage above the 10GB they give everybody for free), and some others.
    - jacksmith21006 8y ago
      One thing that gets confused is that ads are a business model not a product or service.
    - TomK32 8y ago
      MS got their foot in advertising, don't think of Bing as a failure at $5 billion revenue.
    - addicted 8y ago
      Even in advertising it’s arguable that Facebook has become stronger than Google. FB ads already command a premium over Google ones. While Google is still gonna be the dominant player for the foreseeable future, it’s definitely a risk.
      - Alupis 8y ago
        FB may charge more... but you don't constantly see articles about how ineffective Google advertising networks are, and they own a lot more than just one advertising network.
      - NicoJuicy 8y ago
        Fb ads are partially over. Source: ecommerce groups on fb
    - vezycash 8y ago
      I can't understand why MS hasn't made an Adsense competitor, it'll be a fairer fight.
  - jacksmith21006 8y ago
    Plus YouTube which now serves over 1.7B hours of video a day. But then Google also has others climbing like Google photos. Google has now the most popular smart speakers in addition even though came later. https://www.zdnet.com/article/google-overtakes-amazon-in-smart-speaker-market-in-q1/ https://www.zdnet.com/article/google-overtakes-amazon-in-sma... Google overtakes Amazon in smart speaker market in Q1 2018 ...
  - fma 8y ago
    For Microsoft...there's Android "Financially Microsoft is one of the biggest winners from the growth of Android as a platform, thanks to its wide range of patents." https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/ewanspence/2015/11/01/microsoft-android-patent-income/&refURL=https://www.google.com/&referrer=https://www.google.com/ https://www.forbes.com/forbes/welcome/?toURL=https://www.for...
  - youdontknowtho 8y ago
    They only make money on ads, though. Unless I'm missing something...
    - deleted 8y ago
      [deleted]
- jacksmith21006 8y ago
  Google owns five of the top ten apps used on all smartphones. Not aware of any for MS? Plus Google owns the top 2 web sites. http://www.businessinsider.com/most-used-smartphone-apps-2017-8 http://www.businessinsider.com/most-used-smartphone-apps-201... The 10 most used smartphone apps - Business Insider
  - outside1234 8y ago
    Microsoft owns five of the top ten platforms used by enterprises. These enterprises pay them tons of money to make these platforms run, some spending more than $100M each.
    - oculusthrift 8y ago
      sometimes i think people can’t comprehend of products that aren’t in the consumer sphere.
      - dzmien 8y ago
        Hence their shock when they realized how Facebook makes money.
      - kthejoker2 8y ago
        Loved in the Silicon Valley pilot when Gavin Belson sneers at Richard's app because it's for consumers not enterprise. I think it's willful disdain for corporate culture, the last vestige of anti "selling out".
  - NicoJuicy 8y ago
    Ever tried Office Lens of Office?
  - deleted 8y ago
    [deleted]
- radarsat1 8y ago
  > MS collects user data but so do Ubuntu and CentOS... not to the extent Google and FB do it. They're working on it though. I just installed Windows 10 for the first time on a brand new computer I bought. I was shocked to discover that I could not make an account on my own personal machine without "logging in" to a Microsoft service either with an existing or new email address. I looked up tutorials to skip that step but they all pointed to a button ("No account" or something like that) that was not on my screen, I swear. No button was provided to skip logging into a Microsoft account. Next, I had to give them my phone number for user verification. Also no way to skip that step. I had to wait for a verification code, which by the way failed, (got the message, they didn't accept the code), tried again, never got the new message.. figured out how to back out of that, then provided a proper email... Once set up, in making extra user accounts on the machine, they now differentiate for some reason between "Family" users and non-"Family" users. This is on MY PERSONAL COMPUTER. I literally want to just be able to use Microsoft Word on the rare occasion that I am forced to use it, and I found myself having to fork over my phone number and make TWO accounts. (One for ASUS too for some reason.) I found the whole process of setting up Windows shockingly invasive. I even had to explicitly opt out of letting them advertise to me on my own personal computer, and sending my personal info to advertisers. Not on websites. There are ads on like.. the file explorer or something. I mean, what the hell? What is this a shopping mall kiosk? No, it's a laptop I bought and paid for! Why would I want ADS? I dual-booted Ubuntu on it right away, who wanted nothing but my name and desired username, and provided extremely clear method to opt out of submitting my info to Ubuntu servers, and am happily using that now with no issues. MS definitely want your personal information, they just aren't as good at getting it as FB. I wouldn't give them a pass on privacy, not with how Windows 10 is now organized.
  - maltalex 8y ago
    I’ve installed Windows 10 Pro 1803 on two separate machines in the last month. Both with local accounts.
    - fauigerzigerk 8y ago
      Could this be a Pro vs Home thing?
- hardtke 8y ago
  Search ads do not require the collection of user data beyond the search query to be profitable. it can be argued that they don’t violate user privacy.
  - vezycash 8y ago
    You're right in theory. In practice - especially due to adsense, they HAVE TO track users at least to distinguish fraudulent clicks. At least, fraud was the initial reason for tracking.
- cabalamat 8y ago
  > Simply speaking they actually make more products people like to use. They may make more products that people do use, but that doesn't mean that people like using them.
  - zrobotics 8y ago
    Talk to an accountant about excel, and you might hear something about "pry it from my cold dead hands"... And people have religious wars that put tabs/spaces to shame on Xbox VS Playstation
lkrubner 8y ago
I'm puzzled why "Proven"s comment is dead? What they wrote seems accurate. There is no reason why this comment should be downvoted, and certainly no reason why the comment should be dead. This is what they wrote: Simply speaking they actually make more products people like to use. Google essentially has just one, and it’s based on diminishing user privacy to the maximum extent possible. MS collects user data but so do Ubuntu and CentOS... not to the extent Google and FB do it. That is absolutely true. Microsoft has a huge range of products. It produced three of the most profitable products in history: Microsoft Windows Microsoft SQL Server Microsoft Office For awhile, circa 2005-2015, there was some thought that Microsoft's products were going to be replaced by online equivalents, and was a contributing factor that held down Microsoft's stock at that time. But it is now clear that Microsoft's products are going to survive. Partly, Microsoft has adapted to the online world, and partly, large enterprises are more comfortable with Microsoft's model, rather than Google or Zoho or Wufoo or any other online replacements. Microsoft Excel remains the default lingua franca of business. Google Docs and Spreadsheets has not replaced Office. And SQL Server continues to have a huge number of fans, even in a world full of very good open source databases.
- gruez 8y ago
  >certainly no reason why the comment should be dead. probably shadow banned. take a look at his comment history.
  - ma2rten 8y ago
    HN actually has a feature so people with a certain amount of Karma can vouch for a comment like that and make it visible.
  - Clubber 8y ago
    I got rate limited somehow and I can't figure out a way to even know what comment(s) / discussions kicked it off or how to remove it. Almost 5000 karma. Pretty frustrating.
    - hueving 8y ago
wonder_bread 8y ago
Kind of interesting to see Microsoft & Amazon 'passing by' Google lately, considering how much more earning power they have than either of them. Even if Amazon didn't spend a dime on R&D the most they could've earned on operating income is ~$26B, if Microsoft zeroed out their R&D they could've had about ~$35B. Meanwhile, if Google decided to go full-profit last year they would've had on the order of $42B.
- fauigerzigerk 8y ago
  Clearly some investors don't believe in Google's moonshots.
  - Nomentatus 8y ago
    Not unlikely, but as well; both the stock discount and the moonshots have to do with Google being so dependent on one source for its income (ads) as others here have noted.
  - Combasems 8y ago
    So far have any worked out?
    - oprah2018 8y ago
      No one will ever know because those products were killed off...
    - ernopp 8y ago
      Gmail and Android can be considered moonshots, completely separate bets from the cash cow search product. They have both been enormously successful and been the starting point for new revenue lines (the whole GSuite for businesses, the Play Store) Next moonshot which looks extremely promising is Waymo
- adventured 8y ago
  That's not a very good accounting comparison. If Microsoft had zeroed out their R&D last quarter, they'd have produced $12 billion in operating income. Your $35b figure includes a fluke quarter. Microsoft's trailing four quarters figure, with R&D zeroed out, will jump to ~$47 billion once the present quarter is reported. Google's trailing four quarters figure will be similar, around ~$48 billion, assuming their present quarter is close to the prior three (which are at about $36b together, with R&D zeroed out).
rb808 8y ago
I dont really understand this. The race for hosting VMs/Containers is a great short term opportunity but there is no long term differentiation to be had. I suspect in 10-20 years Azure wont make much money . Meanwhile Windows and Office are still popular but not as compelling as they used to be. Xbox? I'm not sure why Microsoft is so popular with investors.
- inerte 8y ago
  10-20 years is a looooong time for quarterly results focused “investment”
- sanxiyn 8y ago
  Differentiation is enormous amount of CAPEX required. Cloud is priting money and Azure is solid #2. I don't see both changing. (That is, profitable cloud and Microsoft's cloud position.)
- outside1234 8y ago
  VMs/Containers are just the loss leader to a whole set of differentiated services.
- vezycash 8y ago
  Computing started with dumb terminals connected to super computers. Personal computing reversed the trend. Now the trend is reversing. Computing is increasingly being offloaded to the cloud. Gaming, graphics, it won't matter if an app is ARM or x86, 32bit or 64bit or 128bit, windows, android, linux or IOS if it runs on the cloud, even part of the operating system can be handled off hand-held devices. The only limit AFAIK is network latency. As network speeds, reliability improves and costs approaches zero, cloud computing would become more valuable. If battery no longer an issue, cloud computing might wane. Until then, MS is right to bet on cloud.
  - rb808 8y ago
    I completely agree there is a big demand and a big market. The issue is whether providing these services is so profitable that MS deserves to be in the top few companies in the US. Is there really enough pricing power in Azure? Windows used to be strategically important. Outsourced hardware isn't.
Isamu 8y ago
>Google’s demotion is undoubtedly only temporary. I think so, the revenue trend for Google is too strong. Google passed Msft in revenue in FY2016 I believe. But the public perception around Google has taken some hits, and Microsoft has reformed its public image. >Still, this is big news for Microsoft who has shifted focus under the leadership of CEO Satya Nadella Hope so, I've been bullish on Nadella.
- deaddodo 8y ago
  The surface line is the first time I looked at a PC and went: "OK, that's a cohesive computing unit". Like, overall I've always been a Windows/Linux/FreeBSD guy, and despite hardware being very power, there's never really been slick, cohesive option excepting the occasional HP Envy, Thinkpad X1 Carbon, Dell XPS 15, etc. The entire Surface line (hardware wise, RT was a software fluke) has been slick though, IMO.
bfe 8y ago
I've really come to admire Satya Nadella as a great CEO.
- gm-conspiracy 8y ago
  This was a good HBR ideacast interview with him: https://hbr.org/ideacast/2017/09/microsofts-ceo-on-rediscovering-the-companys-soul.html https://hbr.org/ideacast/2017/09/microsofts-ceo-on-rediscove...
- oprah2018 8y ago
  To really get my respect he needs to kill off ads in the Windows start menu and the pervasive Cortana surveillance. To really, REALLY get my respect: I would like to see Microsoft be a pure, best-practice software company. Do GREAT things independently of Windows. Make native Mac applications that are truly great. Make a better Mac application than Apple can. Make better iOS apps. Be a champion of Linux. and so on. Strive for greatness on every platform, embracing that platform's uniqueness.
  - zild3d 8y ago
    VS code is on that list already
  - ernopp 8y ago
    IMO: Outlook on iOS is a better email client than Apple Mail.
  - mrguyorama 8y ago
    I think Microsoft IS doing great on other platforms, and even open-source stuff. Of course I'm blinded by having a fanboy level love for them. Except Windows 10. Reading Raymond Chen's blog, I was always led to believe Microsoft wanted to give the user the power, no matter what, even if it mean shooting yourself in the foot. Windows 10 seems to be the end of that. Stop taking away my power as a user Microsoft. I paid for the damn computer, don't act like it's your property.
  - deaddodo 8y ago
srean 8y ago
They are very different companies culturally -- attract different kinds of people. MS is better in business, Google better in tech. In MS you would have to fight for the permission or space to make something better if its already bringing in enterprise money, where 'making better' could mean well known bugs with possibly easy fixes. At Google it used to be ok to make something better to scratch one's itch, or just because it really ought to be better.
rajeshpant 8y ago
Good to see someone from Bhilai on HN community?
- kumarharsh 8y ago
  He's not from Bhilai, he IS Bhilai!!! :P
oculusthrift 8y ago
I think most people really don’t understand the wide breadth and the real market of Microsoft as compared to other companies. Just look at these charts of income sources of each company: http://ritholtz.com/wp-content/uploads/2017/11/cotd52602.png http://ritholtz.com/wp-content/uploads/2017/11/cotd52602.png Google is literally just Ads whereas Microsoft is very evenly spread. If it lost one area itd be fine in the others. I think people have an exposure bias where they can only comprehend fo the consumer market. When in reality a lot of the consumer market is free and Microsoft is making a killing selling to businesses.
- Analemma_ 8y ago
  HN in general has an info bubble problem, where it looks to them like Microsoft is dying because trendy Bay Area startups all use Slack and Google Docs. But in the rest of the industry, Microsoft is huge and, if anything, getting stronger over time and not weaker. Microsoft products that HN has never even heard of, like Dynamics and Host Integration Server, still make billions in revenue.
  - blakes 8y ago
    Exactly. Honestly I've been telling people for the last year to buy MS stock. They are going for recurring revenue with all their business facing products, and it's working. The business world, outside of SV apparently, runs on MS products.
    - kokey 8y ago
      I think the most important thing is that the recurring revenue products actually doesn't suck. I think it's because it's operating in a competitive market, where switching is easier so it has to work well and also integrate well with other software. This is different from just leveraging lock in and just bringing out updates with less tangible benefits to force people to upgrade.
    - partycoder 8y ago
      If you want a software monopoly trolling everyone with patents, by all means invest in Microsoft.
sureaboutthis 8y ago
Microsoft is now worth more than Alphabet. Fixed that. Alphabet includes Google but also all their other companies. I wonder how many of these included companies are not profitable entities at the moment but future investments and dragged Alphabet's value down a bit. I don't know. I'm just sayin'.
- dullgiulio 8y ago
  Non-profitable companies under the Alphabet umbralla are, as the name suggests, bets. Investors in stock usually take that into account and price in what they think the potential value that they can generate is.
nilsocket 8y ago
I use only one product of Microsoft, Visual studio code But I use many products of Alphabet Inc , Google, (servers) Google docs, (servers) Google drive, (servers) Google keep, (servers) Gmail, (servers) Android, (client) Maps, (servers) YouTube, (servers) Tez, (servers) Play store, (servers) Google translate, (servers), ... Many people don't realise it because almost all of them are available for free. Google products have very market. Incase of Google, they have cost of maintenance almost for every product they develop. But in case of Microsoft, they have less overhead. Windows (client) Azure (servers) Xbox (client) Visual studio (client) Visual studio code (client) SQL (client) MS Office (client) ... Microsoft also needs to push updates but, less than that of Google. YouTube consumes too much of bandwidth, Same is the case with Play Store.
lalos 8y ago
As a long term investor, I'm worried with Google. All the bills are paid by ad revenue, a single horse. Then there is this bubble of claims that they have the best engineers and work environment yet this has not produced any other business equivalent to the ad business. Then they have a reputation of creating awesome tools that then get killed in years, enterprise customers don't like this unpredictability. Microsoft on the other hand is the master of supporting old platforms, I've seen some really old apps (from the 90s) run on the latest OS's. Enterprise loves this and that is were the money is. The only clear strength I see on Google is that they are masters of advertising and I see how they sell to developers that there way is the way to go. That is a good HR strength since they will always have a pipe of engineers that want to work for them.
- bitmapbrother 8y ago
  Microsoft's killing of products and services is actually more prolific than Google. In fact, two more products were just killed today (Groove iOS and Groove Android).
- oprah2018 8y ago
  Imagine how profitable Google (as in the division of Alphabet) would be if they eliminated all the distractions other than the cash cow ad business.
- petra 8y ago
  Ads are Google's business model, but they make their major money from a few different leading products : Search, ad platform(both internal and external), YouTube, Android.
  - staplers 8y ago
    All these Google platforms have lost my decade-long patronage recently due to inability to find what is needed (google thinks it knows me better than myself) and personal-info-commodification.
  - nomel 8y ago
    Do you have a reference for these claims? Search and Youtube seem to be ad hosting platforms, and "ad platfom" seems it would be from ads. The Android ad revenue slice seems to be missing from Google.
bitmapbrother 8y ago
I just checked the market and as of 2:30 PM EST Google is now worth more than Microsoft.
- Jyaif 8y ago
  Somebody should write an article about this.
- shmed 8y ago
  yeah not sure why this was news worthy. Over the last couple of weeks, MSFT and GOOG have been trading places pretty often
s2g 8y ago
They have been trading back and forth for a while. Why is this suddenly news?
s2g 8y ago
> Google’s demotion is undoubtedly only temporary Why?
andyidsinga 8y ago
I find this inline with my own positive vs negative views of microsoft over time. I spent a good part of my early career in the 90s building products on windows and both fearing and admiring microsoft - but mostly fearing and hedging my skills on linux. In the 00's microsoft seemed almost like a non-player and their products mostly legacy. But since windows 10 and my recent experience building on Azure I've been pleasantly surprised and find my view of them back on the positive side. I'm particularly impressed with Azure -- a few years ago I wouldn't have thought they could have created a competent alternative to AWS ..and here they are.

209 points by Bhilai 8y ago

Simply speaking they actually make more products people like to use. Google essentially has just one, and it’s based on diminishing user privacy to the maximum extent possible. MS collects user data but so do Ubuntu and CentOS... not to the extent Google and FB do it.

baud147258 8y ago
For Google, there's also Android, Gmail, Google Drive and Google docs
- Alupis 8y ago
  Overwhelming majority of revenue for Google doesn't come from consumer devices and services... but rather, from advertising. Microsoft has tried hard to get into that arena, but it seems nobody can really edge out Google. Of course, most of Google's devices and services funnel data into the advertising system... but they also do have paid services that are pretty popular, GSuite (Google Apps for Business), Google Domains, Google Drive Storage (paid storage above the 10GB they give everybody for free), and some others.
  - jacksmith21006 8y ago
    One thing that gets confused is that ads are a business model not a product or service.
  - TomK32 8y ago
    MS got their foot in advertising, don't think of Bing as a failure at $5 billion revenue.
  - addicted 8y ago
    Even in advertising it’s arguable that Facebook has become stronger than Google. FB ads already command a premium over Google ones. While Google is still gonna be the dominant player for the foreseeable future, it’s definitely a risk.
    - Alupis 8y ago
      FB may charge more... but you don't constantly see articles about how ineffective Google advertising networks are, and they own a lot more than just one advertising network.
    - NicoJuicy 8y ago
      Fb ads are partially over. Source: ecommerce groups on fb
  - vezycash 8y ago
    I can't understand why MS hasn't made an Adsense competitor, it'll be a fairer fight.
- jacksmith21006 8y ago
  Plus YouTube which now serves over 1.7B hours of video a day. But then Google also has others climbing like Google photos. Google has now the most popular smart speakers in addition even though came later. https://www.zdnet.com/article/google-overtakes-amazon-in-smart-speaker-market-in-q1/ https://www.zdnet.com/article/google-overtakes-amazon-in-sma... Google overtakes Amazon in smart speaker market in Q1 2018 ...
- fma 8y ago
  For Microsoft...there's Android "Financially Microsoft is one of the biggest winners from the growth of Android as a platform, thanks to its wide range of patents." https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/ewanspence/2015/11/01/microsoft-android-patent-income/&refURL=https://www.google.com/&referrer=https://www.google.com/ https://www.forbes.com/forbes/welcome/?toURL=https://www.for...
- youdontknowtho 8y ago
  They only make money on ads, though. Unless I'm missing something...
  - deleted 8y ago
    [deleted]
jacksmith21006 8y ago
Google owns five of the top ten apps used on all smartphones. Not aware of any for MS? Plus Google owns the top 2 web sites. http://www.businessinsider.com/most-used-smartphone-apps-2017-8 http://www.businessinsider.com/most-used-smartphone-apps-201... The 10 most used smartphone apps - Business Insider
- outside1234 8y ago
  Microsoft owns five of the top ten platforms used by enterprises. These enterprises pay them tons of money to make these platforms run, some spending more than $100M each.
  - oculusthrift 8y ago
    sometimes i think people can’t comprehend of products that aren’t in the consumer sphere.
    - dzmien 8y ago
      Hence their shock when they realized how Facebook makes money.
    - kthejoker2 8y ago
      Loved in the Silicon Valley pilot when Gavin Belson sneers at Richard's app because it's for consumers not enterprise. I think it's willful disdain for corporate culture, the last vestige of anti "selling out".
- NicoJuicy 8y ago
  Ever tried Office Lens of Office?
- deleted 8y ago
  [deleted]
radarsat1 8y ago
> MS collects user data but so do Ubuntu and CentOS... not to the extent Google and FB do it. They're working on it though. I just installed Windows 10 for the first time on a brand new computer I bought. I was shocked to discover that I could not make an account on my own personal machine without "logging in" to a Microsoft service either with an existing or new email address. I looked up tutorials to skip that step but they all pointed to a button ("No account" or something like that) that was not on my screen, I swear. No button was provided to skip logging into a Microsoft account. Next, I had to give them my phone number for user verification. Also no way to skip that step. I had to wait for a verification code, which by the way failed, (got the message, they didn't accept the code), tried again, never got the new message.. figured out how to back out of that, then provided a proper email... Once set up, in making extra user accounts on the machine, they now differentiate for some reason between "Family" users and non-"Family" users. This is on MY PERSONAL COMPUTER. I literally want to just be able to use Microsoft Word on the rare occasion that I am forced to use it, and I found myself having to fork over my phone number and make TWO accounts. (One for ASUS too for some reason.) I found the whole process of setting up Windows shockingly invasive. I even had to explicitly opt out of letting them advertise to me on my own personal computer, and sending my personal info to advertisers. Not on websites. There are ads on like.. the file explorer or something. I mean, what the hell? What is this a shopping mall kiosk? No, it's a laptop I bought and paid for! Why would I want ADS? I dual-booted Ubuntu on it right away, who wanted nothing but my name and desired username, and provided extremely clear method to opt out of submitting my info to Ubuntu servers, and am happily using that now with no issues. MS definitely want your personal information, they just aren't as good at getting it as FB. I wouldn't give them a pass on privacy, not with how Windows 10 is now organized.
- maltalex 8y ago
  I’ve installed Windows 10 Pro 1803 on two separate machines in the last month. Both with local accounts.
  - fauigerzigerk 8y ago
    Could this be a Pro vs Home thing?
hardtke 8y ago
Search ads do not require the collection of user data beyond the search query to be profitable. it can be argued that they don’t violate user privacy.
- vezycash 8y ago
  You're right in theory. In practice - especially due to adsense, they HAVE TO track users at least to distinguish fraudulent clicks. At least, fraud was the initial reason for tracking.
cabalamat 8y ago
> Simply speaking they actually make more products people like to use. They may make more products that people do use, but that doesn't mean that people like using them.
- zrobotics 8y ago
  Talk to an accountant about excel, and you might hear something about "pry it from my cold dead hands"... And people have religious wars that put tabs/spaces to shame on Xbox VS Playstation

lkrubner 8y ago

I'm puzzled why "Proven"s comment is dead? What they wrote seems accurate. There is no reason why this comment should be downvoted, and certainly no reason why the comment should be dead. This is what they wrote: Simply speaking they actually make more products people like to use. Google essentially has just one, and it’s based on diminishing user privacy to the maximum extent possible. MS collects user data but so do Ubuntu and CentOS... not to the extent Google and FB do it. That is absolutely true. Microsoft has a huge range of products. It produced three of the most profitable products in history: Microsoft Windows Microsoft SQL Server Microsoft Office For awhile, circa 2005-2015, there was some thought that Microsoft's products were going to be replaced by online equivalents, and was a contributing factor that held down Microsoft's stock at that time. But it is now clear that Microsoft's products are going to survive. Partly, Microsoft has adapted to the online world, and partly, large enterprises are more comfortable with Microsoft's model, rather than Google or Zoho or Wufoo or any other online replacements. Microsoft Excel remains the default lingua franca of business. Google Docs and Spreadsheets has not replaced Office. And SQL Server continues to have a huge number of fans, even in a world full of very good open source databases.

gruez 8y ago
>certainly no reason why the comment should be dead. probably shadow banned. take a look at his comment history.
- ma2rten 8y ago
  HN actually has a feature so people with a certain amount of Karma can vouch for a comment like that and make it visible.
- Clubber 8y ago
  I got rate limited somehow and I can't figure out a way to even know what comment(s) / discussions kicked it off or how to remove it. Almost 5000 karma. Pretty frustrating.
  - hueving 8y ago

wonder_bread 8y ago

Kind of interesting to see Microsoft & Amazon 'passing by' Google lately, considering how much more earning power they have than either of them. Even if Amazon didn't spend a dime on R&D the most they could've earned on operating income is ~$26B, if Microsoft zeroed out their R&D they could've had about ~$35B. Meanwhile, if Google decided to go full-profit last year they would've had on the order of $42B.

fauigerzigerk 8y ago
Clearly some investors don't believe in Google's moonshots.
- Nomentatus 8y ago
  Not unlikely, but as well; both the stock discount and the moonshots have to do with Google being so dependent on one source for its income (ads) as others here have noted.
- Combasems 8y ago
  So far have any worked out?
  - oprah2018 8y ago
    No one will ever know because those products were killed off...
  - ernopp 8y ago
    Gmail and Android can be considered moonshots, completely separate bets from the cash cow search product. They have both been enormously successful and been the starting point for new revenue lines (the whole GSuite for businesses, the Play Store) Next moonshot which looks extremely promising is Waymo
adventured 8y ago
That's not a very good accounting comparison. If Microsoft had zeroed out their R&D last quarter, they'd have produced $12 billion in operating income. Your $35b figure includes a fluke quarter. Microsoft's trailing four quarters figure, with R&D zeroed out, will jump to ~$47 billion once the present quarter is reported. Google's trailing four quarters figure will be similar, around ~$48 billion, assuming their present quarter is close to the prior three (which are at about $36b together, with R&D zeroed out).

rb808 8y ago

I dont really understand this. The race for hosting VMs/Containers is a great short term opportunity but there is no long term differentiation to be had. I suspect in 10-20 years Azure wont make much money . Meanwhile Windows and Office are still popular but not as compelling as they used to be. Xbox? I'm not sure why Microsoft is so popular with investors.

inerte 8y ago
10-20 years is a looooong time for quarterly results focused “investment”
sanxiyn 8y ago
Differentiation is enormous amount of CAPEX required. Cloud is priting money and Azure is solid #2. I don't see both changing. (That is, profitable cloud and Microsoft's cloud position.)
outside1234 8y ago
VMs/Containers are just the loss leader to a whole set of differentiated services.
vezycash 8y ago
Computing started with dumb terminals connected to super computers. Personal computing reversed the trend. Now the trend is reversing. Computing is increasingly being offloaded to the cloud. Gaming, graphics, it won't matter if an app is ARM or x86, 32bit or 64bit or 128bit, windows, android, linux or IOS if it runs on the cloud, even part of the operating system can be handled off hand-held devices. The only limit AFAIK is network latency. As network speeds, reliability improves and costs approaches zero, cloud computing would become more valuable. If battery no longer an issue, cloud computing might wane. Until then, MS is right to bet on cloud.
- rb808 8y ago
  I completely agree there is a big demand and a big market. The issue is whether providing these services is so profitable that MS deserves to be in the top few companies in the US. Is there really enough pricing power in Azure? Windows used to be strategically important. Outsourced hardware isn't.

Isamu 8y ago

>Google’s demotion is undoubtedly only temporary. I think so, the revenue trend for Google is too strong. Google passed Msft in revenue in FY2016 I believe. But the public perception around Google has taken some hits, and Microsoft has reformed its public image. >Still, this is big news for Microsoft who has shifted focus under the leadership of CEO Satya Nadella Hope so, I've been bullish on Nadella.

deaddodo 8y ago
The surface line is the first time I looked at a PC and went: "OK, that's a cohesive computing unit". Like, overall I've always been a Windows/Linux/FreeBSD guy, and despite hardware being very power, there's never really been slick, cohesive option excepting the occasional HP Envy, Thinkpad X1 Carbon, Dell XPS 15, etc. The entire Surface line (hardware wise, RT was a software fluke) has been slick though, IMO.

bfe 8y ago

I've really come to admire Satya Nadella as a great CEO.

gm-conspiracy 8y ago
This was a good HBR ideacast interview with him: https://hbr.org/ideacast/2017/09/microsofts-ceo-on-rediscovering-the-companys-soul.html https://hbr.org/ideacast/2017/09/microsofts-ceo-on-rediscove...
oprah2018 8y ago
To really get my respect he needs to kill off ads in the Windows start menu and the pervasive Cortana surveillance. To really, REALLY get my respect: I would like to see Microsoft be a pure, best-practice software company. Do GREAT things independently of Windows. Make native Mac applications that are truly great. Make a better Mac application than Apple can. Make better iOS apps. Be a champion of Linux. and so on. Strive for greatness on every platform, embracing that platform's uniqueness.
- zild3d 8y ago
  VS code is on that list already
- ernopp 8y ago
  IMO: Outlook on iOS is a better email client than Apple Mail.
- mrguyorama 8y ago
  I think Microsoft IS doing great on other platforms, and even open-source stuff. Of course I'm blinded by having a fanboy level love for them. Except Windows 10. Reading Raymond Chen's blog, I was always led to believe Microsoft wanted to give the user the power, no matter what, even if it mean shooting yourself in the foot. Windows 10 seems to be the end of that. Stop taking away my power as a user Microsoft. I paid for the damn computer, don't act like it's your property.
- deaddodo 8y ago

srean 8y ago

They are very different companies culturally -- attract different kinds of people. MS is better in business, Google better in tech. In MS you would have to fight for the permission or space to make something better if its already bringing in enterprise money, where 'making better' could mean well known bugs with possibly easy fixes. At Google it used to be ok to make something better to scratch one's itch, or just because it really ought to be better.

rajeshpant 8y ago

Good to see someone from Bhilai on HN community?

kumarharsh 8y ago
He's not from Bhilai, he IS Bhilai!!! :P

oculusthrift 8y ago

I think most people really don’t understand the wide breadth and the real market of Microsoft as compared to other companies. Just look at these charts of income sources of each company: http://ritholtz.com/wp-content/uploads/2017/11/cotd52602.png http://ritholtz.com/wp-content/uploads/2017/11/cotd52602.png Google is literally just Ads whereas Microsoft is very evenly spread. If it lost one area itd be fine in the others. I think people have an exposure bias where they can only comprehend fo the consumer market. When in reality a lot of the consumer market is free and Microsoft is making a killing selling to businesses.

Analemma_ 8y ago
HN in general has an info bubble problem, where it looks to them like Microsoft is dying because trendy Bay Area startups all use Slack and Google Docs. But in the rest of the industry, Microsoft is huge and, if anything, getting stronger over time and not weaker. Microsoft products that HN has never even heard of, like Dynamics and Host Integration Server, still make billions in revenue.
- blakes 8y ago
  Exactly. Honestly I've been telling people for the last year to buy MS stock. They are going for recurring revenue with all their business facing products, and it's working. The business world, outside of SV apparently, runs on MS products.
  - kokey 8y ago
    I think the most important thing is that the recurring revenue products actually doesn't suck. I think it's because it's operating in a competitive market, where switching is easier so it has to work well and also integrate well with other software. This is different from just leveraging lock in and just bringing out updates with less tangible benefits to force people to upgrade.
  - partycoder 8y ago
    If you want a software monopoly trolling everyone with patents, by all means invest in Microsoft.

sureaboutthis 8y ago

Microsoft is now worth more than Alphabet. Fixed that. Alphabet includes Google but also all their other companies. I wonder how many of these included companies are not profitable entities at the moment but future investments and dragged Alphabet's value down a bit. I don't know. I'm just sayin'.

dullgiulio 8y ago
Non-profitable companies under the Alphabet umbralla are, as the name suggests, bets. Investors in stock usually take that into account and price in what they think the potential value that they can generate is.

nilsocket 8y ago

I use only one product of Microsoft, Visual studio code But I use many products of Alphabet Inc , Google, (servers) Google docs, (servers) Google drive, (servers) Google keep, (servers) Gmail, (servers) Android, (client) Maps, (servers) YouTube, (servers) Tez, (servers) Play store, (servers) Google translate, (servers), ... Many people don't realise it because almost all of them are available for free. Google products have very market. Incase of Google, they have cost of maintenance almost for every product they develop. But in case of Microsoft, they have less overhead. Windows (client) Azure (servers) Xbox (client) Visual studio (client) Visual studio code (client) SQL (client) MS Office (client) ... Microsoft also needs to push updates but, less than that of Google. YouTube consumes too much of bandwidth, Same is the case with Play Store.

lalos 8y ago

As a long term investor, I'm worried with Google. All the bills are paid by ad revenue, a single horse. Then there is this bubble of claims that they have the best engineers and work environment yet this has not produced any other business equivalent to the ad business. Then they have a reputation of creating awesome tools that then get killed in years, enterprise customers don't like this unpredictability. Microsoft on the other hand is the master of supporting old platforms, I've seen some really old apps (from the 90s) run on the latest OS's. Enterprise loves this and that is were the money is. The only clear strength I see on Google is that they are masters of advertising and I see how they sell to developers that there way is the way to go. That is a good HR strength since they will always have a pipe of engineers that want to work for them.

bitmapbrother 8y ago
Microsoft's killing of products and services is actually more prolific than Google. In fact, two more products were just killed today (Groove iOS and Groove Android).
oprah2018 8y ago
Imagine how profitable Google (as in the division of Alphabet) would be if they eliminated all the distractions other than the cash cow ad business.
petra 8y ago
Ads are Google's business model, but they make their major money from a few different leading products : Search, ad platform(both internal and external), YouTube, Android.
- staplers 8y ago
  All these Google platforms have lost my decade-long patronage recently due to inability to find what is needed (google thinks it knows me better than myself) and personal-info-commodification.
- nomel 8y ago
  Do you have a reference for these claims? Search and Youtube seem to be ad hosting platforms, and "ad platfom" seems it would be from ads. The Android ad revenue slice seems to be missing from Google.

bitmapbrother 8y ago

I just checked the market and as of 2:30 PM EST Google is now worth more than Microsoft.

Jyaif 8y ago
Somebody should write an article about this.
shmed 8y ago
yeah not sure why this was news worthy. Over the last couple of weeks, MSFT and GOOG have been trading places pretty often

s2g 8y ago

They have been trading back and forth for a while. Why is this suddenly news?

s2g 8y ago

> Google’s demotion is undoubtedly only temporary Why?

andyidsinga 8y ago

I find this inline with my own positive vs negative views of microsoft over time. I spent a good part of my early career in the 90s building products on windows and both fearing and admiring microsoft - but mostly fearing and hedging my skills on linux. In the 00's microsoft seemed almost like a non-player and their products mostly legacy. But since windows 10 and my recent experience building on Azure I've been pleasantly surprised and find my view of them back on the positive side. I'm particularly impressed with Azure -- a few years ago I wouldn't have thought they could have created a competent alternative to AWS ..and here they are.