5 ms·

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 incom

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.
- s3r3nity 8y ago
  As a die-hard Excel lover ("you can pry it from my dead hands!") and recent convert to Msft Teams, I agree with you 100%.
  - frandroid 8y ago
    > Teams You don't miss Slack?
    - Proziam 8y ago
      I can't speak for anyone but myself, but I can say I prefer teams to slack. The real-world use of both leads me to see little to no difference in my day to day use. But one has the advantage of being tied natively tied to my entire software suite.
  - hi41 8y ago
    Could you please elaborate the features in Excel you have come to love.
- maxxxxx 8y ago
  Yeah. Uncool companies like MS, Intel and Oracle have shown repeatedly that they can survive and thrive in times of complete paradigm changes. This is something Google and Facebook still have to demonstrate.
  - Grazester 8y ago
    Funny enough both Google and Facebook made the shift to Mobile successfully. Intel and Microsoft did not.
    - maxxxxx 8y ago
      Intel and MS are consistently making a lot of money. Maybe they have missed a few trends but they are doing enough things right to be very profitable and have done this for a very long time.
- partycoder 8y ago
  And I really hope it stays that way. I have rejected jobs because they use Microsoft tools. I dislike the Soviet-like brutalism of Windows and all the bloated software built on top of it. Interoperability is mostly non-existent and if it exists, is limited. Sames goes for configurability. That limits the amount of automation you can achieve. You have absurd nonsense like software taking 1 hour to install (Visual Studio). That is unheard of in any other OS unless you are recompiling everything on your machine, which is optional. Since everything is proprietary and closed source, if some dependency is discontinued you are on your own. And this happens often with Microsoft's own APIs. On top of that, now you have all the telemetry fiasco, ads and nagware integrated directly in the OS. Good job acting in your own self interest. Here's another great idea as good as investing on Microsoft: invest in a patent troll, or tobacco products for kids.
- meuk 8y ago
  Just wanted to add this. My perspective is skewed because my consultancy firm focusses on Microsoft, but most of the companies I've seen use TFS, C#, VS Enterprise, SQL Server, Skype for Business, and Azure (and usually git and Angular as well, as non-Microsoft technologies). .NET Core has a lot of momentum, and a lot of people like the new approach, which seems to be to move faster and to break backwards compatibility. Ironically, I'm not a big fan of Microsoft, but I can see how using almost exclusively Microsoft products helps integration.
adamt 8y ago
Note those charts are FY2016. With the growth of cloud, I suspect those ratios have changed considerably.
- Combasems 8y ago
  Do you have a new chart?
justicezyx 8y ago
The pie chart is dividing revenue sources rather superficially, probably just from the companys financial report. For example, surface is listed as revenue source, where pixel and other hardware products are not listed for Google. And for ads, Google has display ads, search ads, YouTube, these are vastly different market. If we treat ads as one source, we might as well treat windows & office as one category: pc software. In summary, the charts are not convincing to me.
- shmed 8y ago
  The main point from an investor perspective is that if anything happens to the "ads market" landscape, Google as a whole will be greatly affected. For example, new legislation surrounding targeted advertising or use of personal identifiable information for marketing purpose could have a major impact on Google. And those are not some far fetch and unlikely scenario. Some government are eager to put some rules and barriers to protect user privacy and to limit what can be done with it (specially in Europe), and many consumers agree and also care about "their" data. Legislation is not the only risk, even technological breakthrough could shake the ad industry. For example, smartphone became a big deal in the span of very few years. It took Google and Facebook a couple years to adapt to shifting advertising revenue from web browsing to mobile browsing. If you remember some of the early financial reports from Facebook back in 2012, most of them were disappointing due to the fact that many of their users shifted to mobile browsing, and Facebook had a really hard time find a way to display ads on mobile that would result in a click. Their whole business was impacted and it took them a couple years to start growing their ad business again. The main point is, if you only make money by selling 1 thing (which is Ads, regardless of what medium they use to show their ads), then if something actually happens to that source of revenue, the effect is major. The more diversified your revenue source is, the less likely it is that a single event will affect your company in a major way. Again, not saying Google doesn't have many products, and obviously, having search ads, youtube ads, mobile ads, (and more) as different mediums help mitigate some of the risk that could affect those individual products, but they are still very much exposed to the risks of a changing market.
  - justicezyx 8y ago

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.
s3r3nity 8y ago
As a die-hard Excel lover ("you can pry it from my dead hands!") and recent convert to Msft Teams, I agree with you 100%.
- frandroid 8y ago
  > Teams You don't miss Slack?
  - Proziam 8y ago
    I can't speak for anyone but myself, but I can say I prefer teams to slack. The real-world use of both leads me to see little to no difference in my day to day use. But one has the advantage of being tied natively tied to my entire software suite.
- hi41 8y ago
  Could you please elaborate the features in Excel you have come to love.
maxxxxx 8y ago
Yeah. Uncool companies like MS, Intel and Oracle have shown repeatedly that they can survive and thrive in times of complete paradigm changes. This is something Google and Facebook still have to demonstrate.
- Grazester 8y ago
  Funny enough both Google and Facebook made the shift to Mobile successfully. Intel and Microsoft did not.
  - maxxxxx 8y ago
    Intel and MS are consistently making a lot of money. Maybe they have missed a few trends but they are doing enough things right to be very profitable and have done this for a very long time.
partycoder 8y ago
And I really hope it stays that way. I have rejected jobs because they use Microsoft tools. I dislike the Soviet-like brutalism of Windows and all the bloated software built on top of it. Interoperability is mostly non-existent and if it exists, is limited. Sames goes for configurability. That limits the amount of automation you can achieve. You have absurd nonsense like software taking 1 hour to install (Visual Studio). That is unheard of in any other OS unless you are recompiling everything on your machine, which is optional. Since everything is proprietary and closed source, if some dependency is discontinued you are on your own. And this happens often with Microsoft's own APIs. On top of that, now you have all the telemetry fiasco, ads and nagware integrated directly in the OS. Good job acting in your own self interest. Here's another great idea as good as investing on Microsoft: invest in a patent troll, or tobacco products for kids.
meuk 8y ago
Just wanted to add this. My perspective is skewed because my consultancy firm focusses on Microsoft, but most of the companies I've seen use TFS, C#, VS Enterprise, SQL Server, Skype for Business, and Azure (and usually git and Angular as well, as non-Microsoft technologies). .NET Core has a lot of momentum, and a lot of people like the new approach, which seems to be to move faster and to break backwards compatibility. Ironically, I'm not a big fan of Microsoft, but I can see how using almost exclusively Microsoft products helps integration.

adamt 8y ago

Note those charts are FY2016. With the growth of cloud, I suspect those ratios have changed considerably.

Combasems 8y ago
Do you have a new chart?

justicezyx 8y ago

The pie chart is dividing revenue sources rather superficially, probably just from the companys financial report. For example, surface is listed as revenue source, where pixel and other hardware products are not listed for Google. And for ads, Google has display ads, search ads, YouTube, these are vastly different market. If we treat ads as one source, we might as well treat windows & office as one category: pc software. In summary, the charts are not convincing to me.

shmed 8y ago
The main point from an investor perspective is that if anything happens to the "ads market" landscape, Google as a whole will be greatly affected. For example, new legislation surrounding targeted advertising or use of personal identifiable information for marketing purpose could have a major impact on Google. And those are not some far fetch and unlikely scenario. Some government are eager to put some rules and barriers to protect user privacy and to limit what can be done with it (specially in Europe), and many consumers agree and also care about "their" data. Legislation is not the only risk, even technological breakthrough could shake the ad industry. For example, smartphone became a big deal in the span of very few years. It took Google and Facebook a couple years to adapt to shifting advertising revenue from web browsing to mobile browsing. If you remember some of the early financial reports from Facebook back in 2012, most of them were disappointing due to the fact that many of their users shifted to mobile browsing, and Facebook had a really hard time find a way to display ads on mobile that would result in a click. Their whole business was impacted and it took them a couple years to start growing their ad business again. The main point is, if you only make money by selling 1 thing (which is Ads, regardless of what medium they use to show their ads), then if something actually happens to that source of revenue, the effect is major. The more diversified your revenue source is, the less likely it is that a single event will affect your company in a major way. Again, not saying Google doesn't have many products, and obviously, having search ads, youtube ads, mobile ads, (and more) as different mediums help mitigate some of the risk that could affect those individual products, but they are still very much exposed to the risks of a changing market.
- justicezyx 8y ago