Microsoft’s Strategy Is Paying Off

Here’s some good news about Microsoft ($MSFT). We’ve been hearing for a long time how the company is unable to reform itself, but Satya Nadella seems to be shaking things up:

Microsoft’s strategy for moving customers to its cloud email and productivity software is resonating with many corporate customers. Microsoft says the number of commercial seats for Office 365, its flagship productivity and email cloud service, more than doubled over the 12 months ending March 2014. It hopes its moves will lead to sales of a broader array of services to existing customers, including more complex business applications and cloud infrastructure services. But it remains to be seen whether it can convince customers who don’t see the need to switch to cloud-based computing just yet.

Although Microsoft has been selling cloud software, in which it rents email and other applications to customers, for the last several years, that strategy has accelerated under current CEO Satya Nadella, who called for a “mobile first, cloud first” approach to selling software when he assumed the job in February.

Many chief information officers have decided to swap their existing portfolios of productivity software, which includes Microsoft Office and email, to Microsoft’s cloud-based Office 365 service, because they believe making Microsoft the custodian of their email and productivity software enables them to redeploy IT staff to more innovative projects. Microsoft has also made Office 365 more attractive to customers by changing its licensing terms. Now, employees can use the software on up to five devices for the cost of a single license. That option, made available in February 2013, has become increasingly attractive as greater numbers of employees do their work from home, on personal devices, and on the road.

Posted by on June 12th, 2014 at 10:35 am


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