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Why Microsoft is becoming a cloud computing competitor

Anupama Shukla

Must-know: Microsoft's 2014 earnings review (Part 4 of 13)

(Continued from Part 3)

The fall of personal computers

The rapid technology advances have affected all the spheres of life. The preference and growing popularity of smartphones and tablets has brought a rapid shift in the personal computing environment. IDC reported that the second quarter of 2014 saw a decline in worldwide PC shipment, falling to 1.7% on a year-on-year basis.

Microsoft (MSFT) has responded to the PC decline, the falling popularity of Windows operating system and Office, and the growing adoption and prominence of smartphones, tablets, and bring-your-own devices. It announced that the next updated version of Windows—Windows 9—will embrace the operating systems of Windows, Windows Phone, and Xbox into “one single converged operating system.” Windows 9 is expected to be launched in 2015.

Microsoft as a competitor to Amazon

The above chart shows the growth experienced by Amazon (AMZN), Microsoft, IBM (IBM), Salesforce.com (CRM), and Google (GOOGL). Although Amazon retains its market leadership position with 49% growth, it’s facing strong competition from Microsoft. Microsoft grew by 164% in the second quarter of 2014.

Office 365 for the iPad

Microsoft Office has been the cash cow of the company. Satya Nadella amazed the market by announcing that Office 365 is available for the iPad. In April 2014, Microsoft reported that more than 12 million people have downloaded office apps with Word, Excel, and PowerPoint. It claims that those were the three most popular apps in the iPad app store.

Microsoft’s dominant position in enterprise applications will get a boost, as Office 365 is likely to bring more customers into its ecosystem. Also, its rapid adoption is likely to open the gates for the businesses and customers adopting tablets over traditional PCs.

Microsoft Azure’s rising presence

Microsoft’s place in the cloud space is getting strengthened due to success of Microsoft Azure. Microsoft Azure’s cloud services features are unique because of their ability to integrate customer’s virtual machines with the company’s various Cloud OS solutions.

The growth in commercial cloud revenues shows the growing popularity of Office 365 and Microsoft Azure. It also shows their acceptance in the cloud space. Microsoft’s adoption of the cloud computing route for its successful transition is likely to yield results.

Continue to Part 5

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