As the world’s most valuable company, and with a current market cap hovering around $780 billion, Microsoft may be the next company to reach the $1 trillion threshold, according to CB Insights, a strategic intelligence firm.
While it may not grab as many headlines as its buzzier tech giant counterparts, the company is quietly adapting across its core business areas, led by a future-focused Satya Nadella.
Since assuming the CEO role in 2014, Nadella has deprioritized the Windows offering that initially helped Microsoft become a household name, refocusing the company’s efforts on implementing AI across all its products and services.
That’s not the only change: in addition to an increased focus on AI, cloud and subscription services have become unifying themes across products. And to maintain its dominance in enterprise technology, Microsoft is expanding in new areas — like gaming and personal computing — that leverage the company’s own cloud infrastructure.
CB Insights dive into the strategies Microsoft is pursuing across cloud, enterprise IT, AI, gaming, and more to see how the company is positioning itself for the future.
Since Nadella replaced Steve Ballmer as CEO in February 2014, Microsoft’s value has grown by approximately 200%.
This growth is due in part to recent leadership changes that prioritize key areas like cloud, AI, and gaming. In March 2018, Nadella announced leadership changes that resulted in two major organizational developments: deprioritizing Windows, while prioritizing AI.
Once a core business for Microsoft, Windows now falls under the leadership of Rajesh Jha, EVP of Experiences & Devices, as one of the many products under Jha’s purview.
Meanwhile, Microsoft’s AI initiatives are now split between two executives, Scott Guthrie, EVP of Cloud & AI, and Harry Shum, EVP of AI & Research.
Based on these changes, it seems that Microsoft will pursue AI through three different strategies.
First, it will cater to customers looking to add AI functionality to their applications by offering AI developer tools and services in Azure.
Second, Microsoft will infuse AI in everything from its software to its laptops in an effort to improve the customer experience.
And third, the company will leverage AI to improve all aspects of its internal operations.
Given that Microsoft generates a majority of its revenue from its Productivity & Business Process and Intelligence Cloud segments, the company is prioritizing AI in these areas most.
So far, Microsoft’s strategy seems to be yielding positive results: in its most recent quarter, the company reported higher than expected earnings, driven largely by the strong performance of its cloud products and business services.