Microsoft Is Now More Valuable Than Alphabet (cnbc.com) 126
Microsoft has surged 40 percent over the past 12 months to become more valuable than Alphabet. "As of Tuesday's close, Microsoft was worth $749 billion and Alphabet's market capitalization stood at $739 billion," reports CNBC. From the report: Microsoft's latest rally has been sparked by growth in its cloud computing business, which is bigger than Google's though it still trails Amazon Web Services. In March, Microsoft reorganized its Windows and Devices Group and moved its engineering resources into other units, including one focusing on cloud and artificial intelligence. Both Microsoft and Alphabet beat analysts' expectations in the first quarter. Microsoft still trails behind Apple's market valuation of $923 billion and Amazon's $782 billion market cap.
Bad and Wrong now more valuable than Don't Be Evil (Score:2, Insightful)
This seems entirely academic to me. They're about the same size and neither is out for your good.
And the difference seems to be mostly from re-arranging things on paper to boot. Colour me suitably impressed.
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That's not how that works.
Re: Bad and Wrong now more valuable than Don't Be (Score:1)
You win the award of the wrongest person on Slashdot today
Re: Bad and Wrong now more valuable than Don't Be (Score:1)
What ?
You know you can split stocks right ? Microsoft did it multiple times to reduce the price of one share, but it doesn't change anything on the market cap.
The only metric that matter is market cap. Alphabet and Amazon could decide to split on a 1:10 ratio to lower the entry price, market cap would stay the same... basic math.
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Stock value works on supply & demand. If the company issues more stock, the price will go down if there are no other factors pushing it up. A company with lots of cash and a poor performing stock price will do a buy back which forces the price up because now there are fewer available.
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Go home Ben, you're drunk.
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Your logic suggests we can have the government simply print twice as much cash, give the second half out to the poor, and cure poverty. Why didn't anyone think of that!
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Re: Bad and Wrong now more valuable than Don't Be (Score:5, Insightful)
That's slightly less wrong than the original dumbass, but still rather out to lunch.
In very simple terms stocks are just a representation of ownership. If I start a business, I own 100% of the stock. If I then decide I would like some cash instead of ownership, I can sell you 50% of my stock. Now you and I own an equal share of the business. If the business earns a profit, we each get 50% of the profit (this is known as dividends). When a major business decision needs to be made, we each get an equal say. If the business gets bought up by an outside entity, we split the price of the sale. Etc.
Of course each of us is free to further sell our one half to as many people as we like. And if we agree to it together, we can split our shares to slow for a finer grain of subdivision. This is where the other guy was confused. If you and I each own 50% of 1000, worth $100 each, we can agree that we each own 50% of 10,000 worth $10 each. The number of shares doesn't affect the goal value of the company, nor does it have anything to do with debt; it only affects the unit price of the stock.
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That is one way to do it (although technically it's a little bit more than just agreeing ;))
Another way is to issue new stocks, let's say for instance we need $50000 for some investments, and we have an investor willing to pay that.
Then we can issue 500 new stocks, for $100 each, which would bring the total number of stocks up to 1500. Each stock would still be worth $100, but the market value would raise from $100 000 to $150 000, and each of us would own 33.33% of the company.
Of course, if the investor is
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Or issue class B shares with lesser voting powers, and class C shares who get in the back of the line when there's a bankruptcy, and so forth. These are all ways to keep the original invetors happy, or as ways to maneuver around dislodge the original owner, etc. This happens with private companies, since when becoming public you have to be much more transparent and follow external rules.
Equity is not the same as debt (Score:5, Informative)
I'm no expert, but does issuing more shares not just mean you are more in debt?
No. Debt is a different thing. Shares are not a loan, they are a percentage ownership in the company. When you issue stock for sale you are literally selling a portion of the company. Nothing is being loaned. Debt holders typically get repaid before anyone else. Equity holders typically get paid last.
That's not to say that the new owners won't expect a return on their investment but the expectation is that this will come from company growth without a fixed timeline or cash outlay. Generally speaking equity is usually more expensive than debt because the risk to the investor is higher. Research "cost of capital" if you want to understand more.
Aren't shares essentially taking a mortgage on your company, but you do not even have to pay anything back, beyond empty promises.
No they aren't like a mortgage at all. The new owners will expect a return on their investment, this will come in the form of a growing company profits. If the company doesn't deliver those profits at some point the stock price will plunge and the company will either be sold/liquidated or will be unable to raise additional capital. If the company cannot raise capital and isn't profitable then they will go bankrupt.
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Not how market cap works (Score:4)
Apple, Microsoft and Facebook have achieved their huge "market cap" simply by issuing more shares of stock than anyone else -- billions of shares.
Umm, you do realize that if you put more shares out they will be worth less individually, right? The share price isn't fixed so you don't get a bigger market cap just by issuing more shares. There has to be demand for the shares regardless of the number of them. Berkshire Hathaway famously hasn't split their shares for a long time so each share is worth tens of thousands of dollars. You can have the same market cap with fewer shares with a higher value or more shares with a lesser value. It's literally identical to saying a $20 bill is identical in value to two $10 bills. It's only the total value that matters.
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The price of an individual share is immaterial. Issuing more shares just dilutes the value of existing shares. If you do a two-for-one stock split, the share price halves. The main benefit of having a lower individual share price is that it makes it easier for smaller investors (e.g. individuals) to get in on the game. Apple in particular doesn't like their share price to get too high, so they've done regular two-for-one splits to keep it at a level where it's easy enough for individuals to afford to bu
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Apple, Microsoft and Facebook have achieved their huge "market cap" simply by issuing more shares of stock than anyone else -- billions of shares.
LOL, that's not how shares work.
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Re: They are in for a shock (Score:1)
"I've turned down offers from IBM before and sent them nasty replies"
Man, if Wall Street gets wind of the fact that IBM received a letter from some self entitled douchebag, IBM stock will crash hard!
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I can't really agree with that statement, as Microsoft has kind of "reinvented" themselves as a cloud services company. They probably make as much money off of Azure and Office 365 than they do selling copies of Windows now.
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Re:They are in for a shock (Score:4, Interesting)
I agree there is bound to be a major breach of a major cloud provider that will damage cloud's reputation, creating a major P/R kick to the nuts.
I'm not saying cloud is necessarily less secure, only that breaches will affect a lot of companies at the same time, creating a P/R nightmare. It's comparable to car crashes versus plane crashes. Your chance of dying in a car is higher per mile, but it rarely makes the news because deaths are piecemeal, unlike jet crashes.
It's not necessarily fair, but it's the way news works, setting cloud up for an ugly future.
Microsoft should be worth more (Score:5, Insightful)
Comparing Microsoft to Google is embarrassing. Google makes much of its revenue from ads, Microsoft is extremely well rounded tech company selling a OS, Azure, Xbox, Office Suite, Cloud services, and hardware. Now comparing Apple to Microsoft would be a much more equal comparison.
Re:Microsoft should be worth less (Score:2)
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Who is Older Evil and who is Newer Evil?
Microsoft Started April 4, 1975
Apple Started April 1, 1976
Neither are new companies, they are actually rather old for tech companies.
They have been flip flopping back and forth which is more hated.
Microsoft was well liked because you could buy a computer from multiple manufacturers and have your software work on it, while Apple you were stuck with Apple Hardware.
Microsoft with dominance in windows, Began to make their products shotty and broken (Windows ME) because th
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Re:Microsoft should be worth less (Score:5, Interesting)
It is not just older vs newer evil, these companies have different evil based on their business model.
Apple is a hardware company, their evil is planned obsolescence
Google is an advertising company, their evil is invasion of privacy
Microsoft is a software company, their evil is proprietary software lock down
Amazon is an online shopping company, their evil is destroying the local economy
Re: Microsoft should be worth more (Score:1)
Lol, you mean Google is one of the biggest hustlers on the planet, and Microsoft is an old has-been hustler that, despite having been the definition of evil for decades, just cannot keep up with the level of evil of the new generation... ... and Wall Street *loves* hustlers.
Stealing wealth from people without giving actual worth of that value in return.
Since it is literally their only reason and mode of existence.
Yeah, cancer upon cancer, and everybody acts like it is OK because it is normal.
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Google also has many quality products, they just monetize in a different way. But valuation is based more on potential than revenue.
Valuation - anything you want it to be. (Score:1)
But valuation is based more on potential than revenue.
One can value a company anyway they want to. Discounted Cash Flows, Book value, P/E ratios how tall the management is, what one thinks the potential is, what one is TOLD the potential is, ALL the above, one's own model,.....
But keep in mind, ALL of those methods are trying to predict the future. Finance is the only field I have ever witnessed fortune telling being taken seriously - to be a bit hyperbolic.
In the end it's what people perceive the value is. And some is panic..
I was scratching my head over wh
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Comparing Microsoft to Google is embarrassing. Google makes much of its revenue from ads, Microsoft is extremely well rounded tech company selling a OS, Azure, Xbox, Office Suite, Cloud services, and hardware. Now comparing Apple to Microsoft would be a much more equal comparison.
If you asked me which one would most likely still be around 100 years from now I'd have to say Alphabet. Microsoft's two biggest software items, Operating System and Office could easily be usurped at any time. Lack of reasonable alternative has been the only reason Windows has stayed on top. What are the alternatives- Apple or Linux? No surprise windows is on top. Google, or someone else could come along with a better OS any day- and Office is a product whose day appears to have come- losing market sha
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Comparing Microsoft to Google is embarrassing. Google makes much of its revenue from ads, Microsoft is extremely well rounded tech company selling a OS, Azure, Xbox, Office Suite, Cloud services, and hardware. Now comparing Apple to Microsoft would be a much more equal comparison.
If you asked me which one would most likely still be around 100 years from now I'd have to say Alphabet. Microsoft's two biggest software items, Operating System and Office could easily be usurped at any time. Lack of reasonable alternative has been the only reason Windows has stayed on top. What are the alternatives- Apple or Linux? No surprise windows is on top. Google, or someone else could come along with a better OS any day- and Office is a product whose day appears to have come- losing market share.
MS also has Xbox, but video game market is very tricky- and with mobile devices becoming more powerful- you'd have to bet on Xbox being a minority player in a decade.
In comparison, Alphabet seems more diverse, Operating Systems, Search Engines, self-driving cars, ISP, and unlike MS, they terminate dying products and replace them with new successful ones when they reach end of life.
If only one of those two companies were alive 100 years from now; I'd bet on Alphabet.
I think this is a very tough assessment to make. If I had to bet on someone being around 100 years from now, it would be Amazon - "Sears, on the Internet" will likely continue to be a bedrock for them, and though their stock price will plummet if AWS dies tomorrow, as long as they can still sell books and clothes and toothpaste, they at least have a tangible business to fall back on if it came down to it.
As for your assessment of MS, I think it's a bit misleading. First, MS is making money using the Google
Re:Microsoft should be worth more (Score:4, Interesting)
MS is now a cloud services company, with a sideline in OSs. Amazon is a cloud services company with a gift shop. Google is an advertising company with an app store sideline.
Cloud services will be around for as long as you can predict anything in this field. Advertising is forever, but Google is unique in history in dominating ad spend for so long - hard to guess how long that will last.
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Google also makes ~30% of all app purchases outside of China. That's where another chunk of revenue is coming from. But people tend to assign it a higher multiplier for some reason.
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Agreed. I use Google's services every day, but Microsoft is just some company I occasionally read about on Slashdot, and where I haven't seen their products in (holy crap, how time flies!) about 14 years now. It's interesting to hear that Microsoft is still technically in business. But Google's constantly in my face.
You should probably try to make valid points... (Score:2)
Comparing Microsoft to Google is embarrassing. Google makes much of its revenue from ads, Microsoft is extremely well rounded tech company selling a OS, Azure, Xbox, Office Suite, Cloud services, and hardware. Now comparing Apple to Microsoft would be a much more equal comparison.
Google has an OS, Cloud offerings (which you mention twice for Microsoft), Google Docs (as well as other cloud offerings), and hardware. They also do things MS does not, like sell phones. And create services that people really want and use. It could be argued that they jam them down your throat via the Android platform - which is most assuredly true - but they are true innovators. They rule search (you forgot to mention Bing). They gave us Maps maps with traffic and streetview. So many more things tha
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Google does all those things too, they don't just do 'ads'. ...
ChromeOS/Android, google cloud, chromecast, chromebooks, phones, speaker-spy-devices,
Question is (Score:1)
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Apple is so close, they will probably be first to $1 Trillion. But they may be caught soon enough if they don't start innovating. Mid range phones are getting better and better, and it's becoming very hard to justify spending $1000 on a new phone. My phone cost $300 and there really isn't anything it doesn't do. It also doesn't have any performance problems that I can see. The camera is great, although not as good as an iPhone. However, with the extra $700 left over I have a lot of money to spend on an a
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I'm somewhat of a photographer myself (kinda, really).
When I am doing a shoot of some sort, and everyone gets together for a photo, I just let them go nuts with their phones. I don't even bother taking the picture.
First- the quality of their photos will be good...fine...potentially even better than my own because I am doing something totally different.
Second- I hate those shots. They are not going to be great no matter what you do- unless you are Vanity Fair.
I agree that phones are good/great for this. A
i do not get apple evaluation at first (Score:5, Interesting)
Then I learned that Apple reported net income of 50B annually recently.
Apparently, marketing works. They probably have the highest markup margin in tech.
Valuation, not "evaluation" (Score:5, Informative)
Then I learned that Apple reported net income of 50B annually recently.
They've been around that number for the last three years. Please do keep up.
Apparently, marketing works.
Companies don't get to Apple's size without provide a shit ton of value to customers. Might not be value to you but it definitely is value to a lot of people and it sure as shit isn't just marketing.
They probably have the highest markup margin in tech.
No they do not. It's not at all uncommon for software companies to have higher margins than Apple. Microsoft [ycharts.com] routinely has higher net margins than Apple [ycharts.com]. On average around 5% higher which is a HUGE amount.
Re: Valuation, not "evaluation" (Score:2, Insightful)
Sure thing fanboi. Let's pretend that they got there based on a super good operating system, super not buggy software, and super not bending or constantly failing hardware!
It totally has nothing to do with tax evasion scams, aggressive lawsuits, patent trolling, and a mindless army of fucking morons like you to run defense.
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I don't use apple anything so I can safely say I am not a fanboy.
Let's pretend that they got there based on a super good operating system, super not buggy software, and super not bending or constantly failing hardware!
It totally has nothing to do with tax evasion scams, aggressive lawsuits, patent trolling, and a mindless army of fucking morons like you to run defense.
Most of that is done fairly evenly across the phone and OS spectrum so while you don't have to pretend it isn't happing, you can mark it out as making a difference since all the big boys have that check mark for those boxes.
Re: Valuation, not "evaluation" (Score:4, Informative)
Literally 100% of the things you named have been done by competitor companies. There are various complains about Microsoft's operating system, or Android. Or are you claiming those OSes have no bugs and no issues? Samsung released a phone that literally burst into flames. While the iPhone 6 was potentially prone to bending, HTC's M8 bent at a similar force, according to Consumer Reports. And to be fair to both Samsung AND Apple, both those companies went back and fixed those issues with their devices. I no more expect a new iPhone to bend as I do a Samsung to catch on fire.
If you want to talk dirty tricks, Samsung is at the top of the heap—it's a well known part of their MO, even in Korea. LG has taken Samsung to court tonnes of times for copying product design. Samsung will copy a product, then just drag out the inevitable court cases until it's no longer relevant, and any penalties they endure are less than the value that they gained by copying. You think Google or Microsoft pay more taxes than Apple does? They've all got teams of well paid accountants telling them how to avoid taxation.
There are plenty of reasons not to like Apple's products, on a product-by-product basis. Siri's a mess, the keyboard on the new laptops is criminally prone to failure AND expensive to replace, and the Mac Pro and Mac Mini are embarrassing in their lack of updates. But every company has duds in their lineup, and Apple is no worse than anyone else.
Maybe you should think about why you're so mad that Apple's products provide value to so many people. If you don't like them, move on.
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Google pays zero by using a "double dutch sandwich" and putting all their cash in the Caymens*. Apple hid money in... Ireland? Jersey? One of the European havens.
* Or did until the new tax bill. Now I have no idea.
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They probably have the highest markup margin in tech.
No they do not. It's not at all uncommon for software companies to have higher margins than Apple. Microsoft [ycharts.com] routinely has higher net margins than Apple [ycharts.com]. On average around 5% higher which is a HUGE amount.
To be fair, you're comparing a software company to a hardware one.
Google (~30%), Facebook (~40%) and many other emerging software company have huge profit margin. This is comparing Apple and Orange.
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"To be fair, you're comparing a software company to a hardware one."
INTC has a slightly higher net margin than MSFT.
Apple is a software company (Score:2)
To be fair, you're comparing a software company to a hardware one.
No I am not. Apple is a software company [youtube.com] at its core. No less an authority than Steve Jobs himself has said so publicly. Not a traditional one to be sure but they don't actually make any of the hardware they sell so they by definition cannot be a hardware company. A company is what it makes and for all practical purposes the only thing Apple actually makes themselves is software. They design some of the hardware but that's not the same thing.
Re:Apple is a software company (Score:5, Informative)
To be fair, you're comparing a software company to a hardware one.
No I am not. Apple is a software company [youtube.com] at its core. No less an authority than Steve Jobs himself has said so publicly. Not a traditional one to be sure but they don't actually make any of the hardware they sell so they by definition cannot be a hardware company. A company is what it makes and for all practical purposes the only thing Apple actually makes themselves is software. They design some of the hardware but that's not the same thing.
According to Business Insider, [businessinsider.com]
Apple : 63% of the revenue come from iPhone Sales (Hardware), 11% from iPad (Hardware), 11% from Mac (Hardware) and 5% from other product (Hardware). Only 11% are from services (software). So it's 89% Hardware and 11% Software.
Microsoft : 11% are from XBox (Hardware) and 5% are from Surface. Then there's 28% from Office Products (Software), 22% from Windows Server & Azure (Software), 18% from others (Most of it is Software), 9% from Windows (Software), and 7% from Ads (Software). So it's 16% Hardware and 84% Software.
I stand my point.
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According to Business Insider, [businessinsider.com]
Apple : 63% of the revenue come from iPhone Sales (Hardware), 11% from iPad (Hardware), 11% from Mac (Hardware) and 5% from other product (Hardware). Only 11% are from services (software). So it's 89% Hardware and 11% Software.
That's ignoring that the major selling point of the hardware is the software that comes with it - IOW half of the hardware revenue should actually be counted as software revenue.
Apple will die because they are hardware focused (Score:2)
Android will kill them, because they are open. Not totally. But kill growth and then a long, slow decline.
Even some of my kids friends at school have given up on expensive iPhones. And Apple is, today, a one product company.
They pulled a rabbit out of the hat with iPad. Then continued that with the iPhone. But there is now no obvious place to go.
They are hoping for another rabbit with self driving cars. But that is already a crowded space, unlike the old iPad or iPhone markets.
If Apple had been a softw
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According to Business Insider, [businessinsider.com]
Apple : 63% of the revenue come from iPhone Sales (Hardware), 11% from iPad (Hardware), 11% from Mac (Hardware) and 5% from other product (Hardware). Only 11% are from services (software). So it's 89% Hardware and 11% Software.
That's ignoring that the major selling point of the hardware is the software that comes with it - IOW half of the hardware revenue should actually be counted as software revenue.
If you want to enter an argument, at least take the time to read it from the beginning.
The original argument was that Apple high markup margin wasn't impressing compared to other Tech company. My Argument is that comparing Apple to Microsoft is bad since Apple make a damn lot more hardware than MS. It mean that for each iPhone, there's a great portion of the expense for manufacturing them.
So, back to your point, it's irrelevant to the original argument. No matter how much software they put on the iPhone (I
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Might not be value to you but it definitely is value to a lot of people and it sure as shit isn't just marketing.
People value stupid shit because of marketing. The history of consumer products consists mostly of fads and scams
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value to a lot of people and it sure as shit isn't just marketing.
Here have a thing you know nothing about what it does, I won't tell you what it does, and you have no idea what benefit it will bring:
Sound like you want to buy it? You have it backwards. Value intrinsically is supported by a shitton of marketing otherwise customers have no idea. Everything about Apple's (and Samsung's and Google's and Microsoft's etc) products is driven by marketing. Without it you won't get the value. We often see the same comments about all new products on Slashdot: "Why do I want this?"
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>They've been around that number for the last three years. Please do keep up.
TIL that recently could not possibly mean three years. Ah, millennials.
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>No they do not. It's not at all uncommon for software companies to have higher margins
You are talking profit margins, I specifically said: markup margins.
https://strategiccfo.com/margi... [strategiccfo.com]
If I had a trillion dollars to spend... (Score:2)
"Man, that's a lot of ___". (Fill in the blank in your reply.)
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NB (Score:5, Interesting)
According to cocaine nose jobs from WallStreet?
(Sorry, I've never been convinced by the stock market - to me it's one enormous speculation).
So basically (Score:4, Insightful)
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The evil empire that was beloved by geeks from 1980-1990 just pulled ahead of the evil empire that was beloved by geeks from 2000-2010.
Microsofts Cloud Business (Score:2)
Re: Microsofts Cloud Business (Score:2)
Microsoft isn't a software company anymore! (Score:2)
People think of Microsoft as a software company still, but the reality is that they're not. Google may own all your data, but Microsoft's looking to be the platform that basically every on-premises computing environment migrates to. They are officially done selling software licenses...it's going to be guaranteed perpetual monthly revenue from their customers forever. Soon as they get customers to move to Azure, it's the ultimate vendor lock-in.
You might say "there's no lock-in, I can go to AWS/GCP/whatever
Re:Microsoft isn't a software company anymore! (Score:4, Insightful)
heh, marketing and branding fail (Score:2)
My first thoughts were "Alphabet?...what does Alphabet do...." Didn't even remember that stupid name from google restructuring at first....
Thats a lot of profit (Score:2)
The data users send back must be of great value when sold on the open market.
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They give away the free OS to keep home users hooked. They charge companies. See also, how they make the cash on Office 365.
Basically, just like students used to be considered, the home market is... marketing. Not a profit center.
Gotta give Nadella credit (Score:1)
From a business standpoint, you have to give Microsoft credit for staying on top for 4 decades. No other major tech company has done that. Even IBM didn't reign on high as long. The rapid pace of tech change usually grinds giants down.
Don't get me wrong, M$ is a conniving jerk, but they pulled off an unprecedented business feat.
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Jeez even microsoft employees are turning to linux. Well, this will only be a good thing. I'm really excited about what is going to come down the pipe as more developers start picking up the linux craze and the general population explores it and likes it.
I'm with you though, tried out linux (mint/ubuntu/raspbian for me), never went back, it was just awesome. My wife is using it too, she's got a little raspberry pi hooked up in the bedroom to do facebook and watch tv shows and movies, she loves the thing.