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Good intel. They've been throwing throwing in Teams as a free service and building a massive enterprise moat that will be impossible to disrupt. Slack, which st

Good intel. They've been throwing throwing in Teams as a free service and building a massive enterprise moat that will be impossible to disrupt. Slack, which started out with a NY Times full page advert welcoming Microsoft Teams, ran to Salesforce unable to compete. Imagine Microsoft being able to connect your Teams activity, Edge browser activity and Windows 10 usage to your linkedin profile, github profile (all owned MSFT properties) using a singular Microsoft account, within an enterprise. Microsoft, as a corporation, will have the ability to see the inner workings of a company and build an inter-enterprise social graph. A very ripe target for NSA fusion technology.

015a 6y ago
The only reason I'm not bullish on Microsoft is because I don't know where else they can expand to. Teams is growing in Microsoft shops. There are a LOT of these; if these shops had real-time chat, it took the form of either something like Skype (useless) or a half-dozen siloed Slack servers started by employees (no company-wide benefit). So, they add on Teams; usually its already in the plan they're paying for. Suddenly they realize how alluring real-time chat can be. I'm not convinced its actually more productive for what people use it for, but that's irrelevant to real-time chat's ability to fool you (and the administrators) into thinking its increasing productivity, and that's all that matters for usage. But how does Microsoft reap that into something meaningful? They're not monetizing the app store (that I've seen); they're not monetizing the entire product; maybe it increases lockin, but most of these companies are so lockedin anyway they were never leaving. The argument for data sharing is interesting, but: I hate Microsoft with a feverish passion, and even I'll admit that if they were sharing/correlating significant employee data beyond the firewall of some AD/Teams/whatever instance, they'd have a lot of very angry customers on their hands. I don't see them doing that. I'm biased, but I'm still bearish on them just because their reliable revenue centers are becoming less and less diversified. Yeah, Azure/365. What else do they have? Windows is more and more irrelevant. Browser; lost the war. Github; an expensive side-business. Xbox; a billion dollar money pit with their leaders at the top praying for Halo Infinite. Consumer hardware; nothing. Linkedin; its like Facebook, everyone hates it but everyone has one. If all of their revenue growth is in Cloud, that's still a ton of growth to reap, but I'm not sure it justifies a valuation previously assigned to the 2000s-era multi-disciplinary conglomerate Microsoft was. Amazon is fully capable of (at least) keeping pace with Azure's growth here, and they're also the biggest retailer on the planet with an unassailable operations network. I think, over the next five years, it'll be increasingly "weird" how those two companies are priced so similarly.
- jodrellblank 6y ago
  > "Yeah, Azure/365. What else do they have? Windows is more and more irrelevant. Browser; lost the war. Github; an expensive side-business. Xbox; a billion dollar money pit with their leaders at the top praying for Halo Infinite. Consumer hardware; nothing." I started to copy chunks out of their 2020 Q1 and 2020 Q4 earnings reports, but there's too much. If you genuinely think their revenue was significantly from Internet Explorer, that nobody really uses GitHub, that Azure is a few virtual machines, and they have nothing else - you should skim read them[1][2]. Here are some excerpts: "record Xbox Live monthly active users, console, mobile and PC. Ten years in, Minecraft is stronger than ever, with record revenue and usage". Money pit? Cash cow. "GitHub has grown, up more than 30 percent since our acquisition a year ago. And more than 2 million organizations use GitHub" in Q1 followed by "3 million organizations using GitHub" by Q4. "The state of California is using GitHub and Azure DevOps to power 90 percent of its digital COVID-19 response infrastructure. All 5,000 engineers at Autodesk rely on GitHub to break down silos across the organization. And, at Etsy, developers are using GitHub to deploy to production more than 50 times per day", "At Ford Motor Company alone, 8,000 employees use GitHub". An "expensive side project" giving them huge growth and a foot-in, or extended lock-in, at a ton of companies. "Azure Active Directory Premium, used by more than 100,000 organizations" in Q1 followed by "used by 200,000 organizations" by Q4. "partnership with SAP, making Azure the preferred destination for every SAP customer." (SAP is a huge enterprise company and has 400k business customers). "LinkedIn revenue increased 25 percent" in Q1, and by Q4 "Content shared was up nearly 50 percent year over year, and LinkedIn Live streams were up 89 percent since March. Professionals watched nearly four times the amount of LinkedIn Learning content in June than they did a year ago". "sixty-nine organizations now have more than 100,000 users of Teams, and over 1800 organizations have more than ten thousand users of Teams." "Power Platform already has more than 2.5 million monthly active citizen developers."; "Power Apps monthly active users increased 170 percent year over year." "OEM Pro revenue grew 19 percent, ahead of the commercial PC market, driven by strong Windows 10 demand", "on-premises server business grew 12 percent". "96 percent of the Fortune 500 now use Power BI to find insights in their data." up from 84% in Q1. "our commercial cloud, which surpassed $50 billion in revenue for the first time – up 36 percent year over year" "In June alone, 13.5 billion transactions were processed in Azure Cognitive Services. 2.5 billion messages sent. 9 million hours of speech transcribed" "material growth in the number of $10 million plus Azure contracts" in both Q1 and Q4. In Q4 "Commercial cloud revenue grew 30 percent. Office 365 commercial revenue grew 19 percent. LinkedIn revenue increased 10 percent. In Surface, revenue grew 28 percent. In Windows, overall OEM revenue grew 7 percent. Windows Commercial products and cloud services revenue grew 9 percent. Azure revenue grew 47 percent. Per-user business, growth continued to moderate given the size of our enterprise mobility installed base, which grew 26 percent to over 147 million seats. In Gaming, revenue increased 64 percent." [1] https://view.officeapps.live.com/op/view.aspx?src=https://c.s-microsoft.com/en-us/CMSFiles/TranscriptFY20Q1.docx?version=be2962be-e9f2-6dad-c9da-99da2c3077fa https://view.officeapps.live.com/op/view.aspx?src=https://c.... [2] https://view.officeapps.live.com/op/view.aspx?src=https://c.s-microsoft.com/en-us/CMSFiles/TranscriptFY20Q4.docx?version=0d57e08d-7bdf-419e-da08-e83b4800706a https://view.officeapps.live.com/op/view.aspx?src=https://c....

015a 6y ago

The only reason I'm not bullish on Microsoft is because I don't know where else they can expand to. Teams is growing in Microsoft shops. There are a LOT of these; if these shops had real-time chat, it took the form of either something like Skype (useless) or a half-dozen siloed Slack servers started by employees (no company-wide benefit). So, they add on Teams; usually its already in the plan they're paying for. Suddenly they realize how alluring real-time chat can be. I'm not convinced its actually more productive for what people use it for, but that's irrelevant to real-time chat's ability to fool you (and the administrators) into thinking its increasing productivity, and that's all that matters for usage. But how does Microsoft reap that into something meaningful? They're not monetizing the app store (that I've seen); they're not monetizing the entire product; maybe it increases lockin, but most of these companies are so lockedin anyway they were never leaving. The argument for data sharing is interesting, but: I hate Microsoft with a feverish passion, and even I'll admit that if they were sharing/correlating significant employee data beyond the firewall of some AD/Teams/whatever instance, they'd have a lot of very angry customers on their hands. I don't see them doing that. I'm biased, but I'm still bearish on them just because their reliable revenue centers are becoming less and less diversified. Yeah, Azure/365. What else do they have? Windows is more and more irrelevant. Browser; lost the war. Github; an expensive side-business. Xbox; a billion dollar money pit with their leaders at the top praying for Halo Infinite. Consumer hardware; nothing. Linkedin; its like Facebook, everyone hates it but everyone has one. If all of their revenue growth is in Cloud, that's still a ton of growth to reap, but I'm not sure it justifies a valuation previously assigned to the 2000s-era multi-disciplinary conglomerate Microsoft was. Amazon is fully capable of (at least) keeping pace with Azure's growth here, and they're also the biggest retailer on the planet with an unassailable operations network. I think, over the next five years, it'll be increasingly "weird" how those two companies are priced so similarly.

jodrellblank 6y ago
> "Yeah, Azure/365. What else do they have? Windows is more and more irrelevant. Browser; lost the war. Github; an expensive side-business. Xbox; a billion dollar money pit with their leaders at the top praying for Halo Infinite. Consumer hardware; nothing." I started to copy chunks out of their 2020 Q1 and 2020 Q4 earnings reports, but there's too much. If you genuinely think their revenue was significantly from Internet Explorer, that nobody really uses GitHub, that Azure is a few virtual machines, and they have nothing else - you should skim read them[1][2]. Here are some excerpts: "record Xbox Live monthly active users, console, mobile and PC. Ten years in, Minecraft is stronger than ever, with record revenue and usage". Money pit? Cash cow. "GitHub has grown, up more than 30 percent since our acquisition a year ago. And more than 2 million organizations use GitHub" in Q1 followed by "3 million organizations using GitHub" by Q4. "The state of California is using GitHub and Azure DevOps to power 90 percent of its digital COVID-19 response infrastructure. All 5,000 engineers at Autodesk rely on GitHub to break down silos across the organization. And, at Etsy, developers are using GitHub to deploy to production more than 50 times per day", "At Ford Motor Company alone, 8,000 employees use GitHub". An "expensive side project" giving them huge growth and a foot-in, or extended lock-in, at a ton of companies. "Azure Active Directory Premium, used by more than 100,000 organizations" in Q1 followed by "used by 200,000 organizations" by Q4. "partnership with SAP, making Azure the preferred destination for every SAP customer." (SAP is a huge enterprise company and has 400k business customers). "LinkedIn revenue increased 25 percent" in Q1, and by Q4 "Content shared was up nearly 50 percent year over year, and LinkedIn Live streams were up 89 percent since March. Professionals watched nearly four times the amount of LinkedIn Learning content in June than they did a year ago". "sixty-nine organizations now have more than 100,000 users of Teams, and over 1800 organizations have more than ten thousand users of Teams." "Power Platform already has more than 2.5 million monthly active citizen developers."; "Power Apps monthly active users increased 170 percent year over year." "OEM Pro revenue grew 19 percent, ahead of the commercial PC market, driven by strong Windows 10 demand", "on-premises server business grew 12 percent". "96 percent of the Fortune 500 now use Power BI to find insights in their data." up from 84% in Q1. "our commercial cloud, which surpassed $50 billion in revenue for the first time – up 36 percent year over year" "In June alone, 13.5 billion transactions were processed in Azure Cognitive Services. 2.5 billion messages sent. 9 million hours of speech transcribed" "material growth in the number of $10 million plus Azure contracts" in both Q1 and Q4. In Q4 "Commercial cloud revenue grew 30 percent. Office 365 commercial revenue grew 19 percent. LinkedIn revenue increased 10 percent. In Surface, revenue grew 28 percent. In Windows, overall OEM revenue grew 7 percent. Windows Commercial products and cloud services revenue grew 9 percent. Azure revenue grew 47 percent. Per-user business, growth continued to moderate given the size of our enterprise mobility installed base, which grew 26 percent to over 147 million seats. In Gaming, revenue increased 64 percent." [1] https://view.officeapps.live.com/op/view.aspx?src=https://c.s-microsoft.com/en-us/CMSFiles/TranscriptFY20Q1.docx?version=be2962be-e9f2-6dad-c9da-99da2c3077fa https://view.officeapps.live.com/op/view.aspx?src=https://c.... [2] https://view.officeapps.live.com/op/view.aspx?src=https://c.s-microsoft.com/en-us/CMSFiles/TranscriptFY20Q4.docx?version=0d57e08d-7bdf-419e-da08-e83b4800706a https://view.officeapps.live.com/op/view.aspx?src=https://c....