When Napoleon Bonaparte became the emperor of the French in December 1804, he proclaimed that he “found the crown of France in the gutter and picked it up with a sword.” Within a few years, he took his country to the heights of its glory and established an empire that dominated Europe militarily, politically and culturally for more than 10 years.
Though in a different setting, Satya Nadella – CEO of Microsoft – could also proclaim the same. When he became the Chief Executive officer of the company, Microsoft’s crown was in the gutter; the company had tragically missed the web and mobile revolution. The CEO at the time, Steve Ballmer, was focusing more on old – though reliable – streams of income like Windows and the MS Office suite. Meanwhile, Apple and Google were becoming the dominant players in the mobile computing world.
Then came Nadella. He picked the crown, not with a sword, but with a vision. Today, Microsoft is now the most valuable company in the world.
By contrast, Microsoft’s capitalization stood at 330 billion dollars on May 16, 2014. At the same time, Apple and Google had a market capitalization of 512 billion dollars and 350 billion dollars respectively. Today, May 17, 2019, or exactly 5 years, later, the company’s Market Cap stands at 980 billion dollars. Apple, on the other hand, has a market capitalization of only 869 billion dollars. Google’s is even lower at 806 billion dollars.
Indeed, Microsoft crossed the trillion-dollar mark on April 24, 2019. Though not the first to do, Microsoft has so far been able to maintain certain stability that neither Apple nor Amazon – the first two companies to have crossed the mark – is able to.
Microsoft’s success can be attributed to the vision of its CEO. Under Steve Ballmer, the company had a “mobile first” vision. Despite numerous failures, the Seattle giant kept on spending money on its mobile platform Windows Phone, which lacked in adoption from consumers and consequently in devotion from developers. We all remember the disastrous purchase of Nokia’s mobile phone business, for which Microsoft has nothing to show.
With the change of CEO came also a change of vision. It was no longer “mobile first” but cloud first. In other words, Nadella had brought to the company the realism it lacked under Ballmer. The company was no longer going to focus on a fight that it had already lost, but on one that it could still win. Today, Microsoft is the second largest cloud services provider in the world behind Amazon. It is also the fastest growing among them all.
With businesses and government agencies switching from in-house equipment to cloud-based infrastructure in a drove, Microsoft’s growth can only go up. And perhaps, even more so than market leader Amazon, Microsoft is well positioned to win this battle due to the wide range of services and products, like Office 365, that so many companies already use.
Microsoft is now worth more than 150 billion dollars more than Apple.
Apple nonetheless still makes more money than Microsoft. But as Microsoft did five years ago, Apple seems to be relying more on older streams of incomes rather than looking towards the future. Smartphones are everywhere now; they all look the same and do the same things. Apple is no longer the brand-new kid in town; cloud computing is the new attraction. Hence, the reason of Microsoft’s good fortune.