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As an investor I bought few years ago MSFT stock. I did it as I saw two things: 1. azure 2. o365 1. because I knew what happened (and was happening) with AWS

by rdslw 7y ago

As an investor I bought few years ago MSFT stock. I did it as I saw two things: 1. azure 2. o365 1. because I knew what happened (and was happening) with AWS 2. because microsoft moved to subscription model Those two things, connected with third "secret" incredient: BIGGEST user base (corporate) which WILL use those two offerings = success. Satya is/may be great. I bought stock around 2014/2015 because of the above and nothing more. If you have a big userbase you can monetize it really really well.

spectramax 7y ago
I think your reasoning is a perfect example of Confirmation bias, I do agree with your points but there is no way to analyze this objectively - market is a complex system with game theory and all kinds of players doing unpredictable things, disasters such as password leaks, etc. If results were the opposite, one can come up with various other reasons to explain their losses.
- TheGRS 7y ago
  Sure, but if you do understand what a company is doing under the hood, you can make informed long-term investments based on that (which still pose a risk because of the reasons you stated). If you knew Facebook's history and engineering practices years ago you would have accurately predicted that the other shoe would eventually drop. If you paid attention to Microsoft's shift in focus you would either have thought that it was foolish to try to beat Amazon or it was a great space to invest in because AWS has many flaws. I dunno, I'm just trying to say that knowledge about this stuff can give you an edge in investing.
- ljcn 7y ago
  To be fair the comment says "I bought it because x, y, z", which is probably true; not "it has gone up because x, y, z", although that might be implied.
- cjarrett 7y ago
  Most of the initiatives Satya has gotten credit for were started under Ballmer. Some of the worst moves I've seen regarding current MSFT internal culture were direct results of Satya Source: Me, at MSFT before Ballmer left and still there now. That doesn't mean Satya's not had a good effect overall. Part of the investor postives were due to PR differences that Satya made (which are very good), and his ability to talk about the future of the company is far superior to Ballmer.
  - partingshots 7y ago
    What are some of these negative moves you talk about under Satya? Are you sure it isn't team specific rather than company wide?
    - cjarrett 7y ago
      biggest negative I would say is getting rid of the SDET role and moving them into Telemetry. It moved the onus of testing on Devs who've never done it before as part of their job and thusly very lacking. The bungled W10 recent releases can be directly tied back to this model. As PMs and Devs don't account for testing like they used to before shipping to customers. This may be fine and dandy short-term, but if you're biggest customers rely on stability for code bases over 25 years old--getting rid of focused testing and reliability is a big no-no.
      - hello_moto 7y ago
        > biggest negative I would say is getting rid of the SDET role and moving them into Telemetry. I don't quite understand this move. Would you mind to elaborate? Are you saying that previously SDET role exist at MSFT and today, it does not exist anymore? And that Developers have to rely on Telemetry (logging, metrics, notifications, error reporting, etc etc) ? Perhaps I don't understand "Telemetry" in this statement.
        cjarrett 7y ago
        They erased the Software Developer in Test role, and moved to a 'Quality' role. The 'Quality' role implements Telemetry for the working product which turns into metrics that PMs/Dev Managers look at to determine shipping. I used to be an SDET, and re-interviewed in order to be a Dev after the big switch. I could have rolled right into 'Quality', but I didn't find that as interesting. As a result, the automated Testing that used to be done by the SDET team is moved to be the responsibility of the Dev teams. Most dev teams knew little to nothing about the automated tests that were being run every day against their code (Upgrade tests, BVTs, integration tests). SDETs also created tools and internal frameworks which were created to reduce cost; for example, I implemented a Code-Coverage based test-pass to reduce the 24 hour automated test suite that was running every day on Windows Phone main branch. The previous SDET role's responsbility has moved 100% to Dev Teams, none of which had to ever think about that facet of development before. As a result, you get me implementing automated test suites for 5 different teams in 3 years (WSL, Ink, Text, Touch input, kernel sec) because I know the frameworks more than 25 year veterans of Windows internal development. Some of these teams had 10-15 years of built in collatoral that is now attempting to be revived because management realizes that they've dropped the ball quite a bit.
themagician 7y ago
Recurring payments scale well in good times. No one really knows what’s going to happen in a recession. I suspect it won’t be pretty. Revenues will probably contract just as well in the reverse direction and I suspect many customers will look to cut costs by eliminating monthly recurring expenses. Perhaps recurring revenue business will be more resilient. I can see a path for that as well. But no one really knows.
- henshao 7y ago
  What kind of reoccurring microsoft expenses would an organization be able to shed? Can't really cut back on costs for word and excel/office suite. If your data is in Azure already, it would cost even more probably to move it all off and administer it yourself. Seems like they're pretty well locked in.
  - klank 7y ago
    There is efficient usage of the cloud and inefficient usage. How data is processed, moved around and things like fleet size can all greatly impact your final bill. Most companies don't optimize for cloud costs to great lengths.
- jacques_chester 7y ago
  You can make the same argument for the old CDs-in-boxes model too. "If there's a recession, sales will go down". The difference is that recurring payments vastly improve your cashflow situation. Instead of giant pulses every 3 years you have a smoother pipeline of cash coming in all the time. Even if that pipeline shrinks, it still flows. It's far easier to plan for a 10% reduction that happens continuously than a 3 year plan with lots of "??$??" sprinkled throughout it. And far easier to recover from mistakes.
awinder 7y ago
Is microsoft actually making a lot of money off Azure once you've divorced office 365 revenue from the cloud bucket? Clearly you made a good market decision but I've yet to see anything to suggest that Azure as a pure-play is a runaway financial success, and even where Azure is making money it's not been to AWS' detriment
deleted 7y ago
[deleted]
stcredzero 7y ago
1. because I knew what happened (and was happening) with AWS What is this, specifically?
- mcintyre1994 7y ago
  Presumably that it's printing money for Amazon, so they hypothesised Azure could do the same for Microsoft.
  - stcredzero 7y ago
    The phrasing sounded like something bad was happening to AWS.
- otikik 7y ago
  Now it is extremely profitable. Before it was extremely profitable, and it had no competition.
  - stcredzero 7y ago
    In terms of supporting Windows on the Cloud, I would bet on Microsoft out-competing AWS.
    - otikik 7y ago
      That's a very small piece of AWS's pie.
      - stcredzero 7y ago
        Likely to become a big slice of Azure's
        otikik 7y ago
        Your last statement doesn't counter mine.
ccjnsn 7y ago
What you say is true, was a good move buying in. Though the big corporate user base is not a certain success, IBM is a testament to this. (Was going to say Oracle too, they haven't had a stock surge comparable to Microsoft but seem to be growing (some how?))
jimbokun 7y ago
Satya is great because he saw the same things you did, and executed on them very well.

by rdslw 7y ago

spectramax 7y ago

I think your reasoning is a perfect example of Confirmation bias, I do agree with your points but there is no way to analyze this objectively - market is a complex system with game theory and all kinds of players doing unpredictable things, disasters such as password leaks, etc. If results were the opposite, one can come up with various other reasons to explain their losses.

TheGRS 7y ago
Sure, but if you do understand what a company is doing under the hood, you can make informed long-term investments based on that (which still pose a risk because of the reasons you stated). If you knew Facebook's history and engineering practices years ago you would have accurately predicted that the other shoe would eventually drop. If you paid attention to Microsoft's shift in focus you would either have thought that it was foolish to try to beat Amazon or it was a great space to invest in because AWS has many flaws. I dunno, I'm just trying to say that knowledge about this stuff can give you an edge in investing.
ljcn 7y ago
To be fair the comment says "I bought it because x, y, z", which is probably true; not "it has gone up because x, y, z", although that might be implied.
cjarrett 7y ago
Most of the initiatives Satya has gotten credit for were started under Ballmer. Some of the worst moves I've seen regarding current MSFT internal culture were direct results of Satya Source: Me, at MSFT before Ballmer left and still there now. That doesn't mean Satya's not had a good effect overall. Part of the investor postives were due to PR differences that Satya made (which are very good), and his ability to talk about the future of the company is far superior to Ballmer.
- partingshots 7y ago
  What are some of these negative moves you talk about under Satya? Are you sure it isn't team specific rather than company wide?
  - cjarrett 7y ago
    biggest negative I would say is getting rid of the SDET role and moving them into Telemetry. It moved the onus of testing on Devs who've never done it before as part of their job and thusly very lacking. The bungled W10 recent releases can be directly tied back to this model. As PMs and Devs don't account for testing like they used to before shipping to customers. This may be fine and dandy short-term, but if you're biggest customers rely on stability for code bases over 25 years old--getting rid of focused testing and reliability is a big no-no.
    - hello_moto 7y ago
      > biggest negative I would say is getting rid of the SDET role and moving them into Telemetry. I don't quite understand this move. Would you mind to elaborate? Are you saying that previously SDET role exist at MSFT and today, it does not exist anymore? And that Developers have to rely on Telemetry (logging, metrics, notifications, error reporting, etc etc) ? Perhaps I don't understand "Telemetry" in this statement.
      - cjarrett 7y ago
        They erased the Software Developer in Test role, and moved to a 'Quality' role. The 'Quality' role implements Telemetry for the working product which turns into metrics that PMs/Dev Managers look at to determine shipping. I used to be an SDET, and re-interviewed in order to be a Dev after the big switch. I could have rolled right into 'Quality', but I didn't find that as interesting. As a result, the automated Testing that used to be done by the SDET team is moved to be the responsibility of the Dev teams. Most dev teams knew little to nothing about the automated tests that were being run every day against their code (Upgrade tests, BVTs, integration tests). SDETs also created tools and internal frameworks which were created to reduce cost; for example, I implemented a Code-Coverage based test-pass to reduce the 24 hour automated test suite that was running every day on Windows Phone main branch. The previous SDET role's responsbility has moved 100% to Dev Teams, none of which had to ever think about that facet of development before. As a result, you get me implementing automated test suites for 5 different teams in 3 years (WSL, Ink, Text, Touch input, kernel sec) because I know the frameworks more than 25 year veterans of Windows internal development. Some of these teams had 10-15 years of built in collatoral that is now attempting to be revived because management realizes that they've dropped the ball quite a bit.

themagician 7y ago

Recurring payments scale well in good times. No one really knows what’s going to happen in a recession. I suspect it won’t be pretty. Revenues will probably contract just as well in the reverse direction and I suspect many customers will look to cut costs by eliminating monthly recurring expenses. Perhaps recurring revenue business will be more resilient. I can see a path for that as well. But no one really knows.

henshao 7y ago
What kind of reoccurring microsoft expenses would an organization be able to shed? Can't really cut back on costs for word and excel/office suite. If your data is in Azure already, it would cost even more probably to move it all off and administer it yourself. Seems like they're pretty well locked in.
- klank 7y ago
  There is efficient usage of the cloud and inefficient usage. How data is processed, moved around and things like fleet size can all greatly impact your final bill. Most companies don't optimize for cloud costs to great lengths.
jacques_chester 7y ago
You can make the same argument for the old CDs-in-boxes model too. "If there's a recession, sales will go down". The difference is that recurring payments vastly improve your cashflow situation. Instead of giant pulses every 3 years you have a smoother pipeline of cash coming in all the time. Even if that pipeline shrinks, it still flows. It's far easier to plan for a 10% reduction that happens continuously than a 3 year plan with lots of "??$??" sprinkled throughout it. And far easier to recover from mistakes.

awinder 7y ago

Is microsoft actually making a lot of money off Azure once you've divorced office 365 revenue from the cloud bucket? Clearly you made a good market decision but I've yet to see anything to suggest that Azure as a pure-play is a runaway financial success, and even where Azure is making money it's not been to AWS' detriment

deleted 7y ago

[deleted]

stcredzero 7y ago

1. because I knew what happened (and was happening) with AWS What is this, specifically?

mcintyre1994 7y ago
Presumably that it's printing money for Amazon, so they hypothesised Azure could do the same for Microsoft.
- stcredzero 7y ago
  The phrasing sounded like something bad was happening to AWS.
otikik 7y ago
Now it is extremely profitable. Before it was extremely profitable, and it had no competition.
- stcredzero 7y ago
  In terms of supporting Windows on the Cloud, I would bet on Microsoft out-competing AWS.
  - otikik 7y ago
    That's a very small piece of AWS's pie.
    - stcredzero 7y ago
      Likely to become a big slice of Azure's
      - otikik 7y ago
        Your last statement doesn't counter mine.

ccjnsn 7y ago

What you say is true, was a good move buying in. Though the big corporate user base is not a certain success, IBM is a testament to this. (Was going to say Oracle too, they haven't had a stock surge comparable to Microsoft but seem to be growing (some how?))

jimbokun 7y ago

Satya is great because he saw the same things you did, and executed on them very well.