Microsoft is among the largest companies on earth, with a diversified portfolio. Owned by billionaire Bill Gates, Microsoft acquired other companies like LinkedIn, GitHub, Skype, and more over the years. Today, Microsoft is a tech empire that spans software, social media, gaming, and more.
Subsidiary / Division
Business Category
Key Differentiator
Integration Strategy
Microsoft Azure
Cloud Computing and Services
A comprehensive cloud platform and services.
Represents Microsoft’s push into cloud computing, offering infrastructure, platform, and software services to businesses and developers worldwide.
Microsoft 365
Productivity and Collaboration Tools
Suite of office productivity and collaboration apps.
Provides subscription-based access to Microsoft’s popular Office applications and cloud services, serving both businesses and consumers.
Windows
Operating Systems and Software
Iconic operating system for personal computers.
Remains at the core of Microsoft’s software ecosystem, providing a platform for various applications and services.
Xbox
Gaming and Entertainment
Gaming consoles, games, and online services.
Expands Microsoft’s presence in the gaming industry, leveraging a loyal gaming community and offering subscription-based services.
LinkedIn
Professional Networking
Largest professional networking platform.
Enhances Microsoft’s presence in the professional networking space, offering synergies with its cloud and productivity offerings.
GitHub
Software Development and Collaboration
Leading platform for developers and code sharing.
Provides a hub for developers, enabling collaboration and code-sharing, aligning with Microsoft’s developer-focused initiatives.
Microsoft Dynamics
Enterprise Resource Planning (ERP)
Suite of business applications for enterprises.
Offers solutions for businesses, including customer relationship management (CRM) and enterprise resource planning (ERP) software.
Microsoft Research
Research and Innovation
Conducts research in various technology domains.
Drives innovation across Microsoft’s products and services through cutting-edge research and technology development.
Microsoft Edge
Web Browsers
Modern web browser with integrated features.
Represents Microsoft’s entry into the web browser market, enhancing its web-related offerings.
Skype
Communication and Video Conferencing
Video and voice communication platform.
Expands Microsoft’s communication services, offering video conferencing and messaging capabilities.
Microsoft Office
Office Productivity Suite
Suite of office applications and services.
Serves as a cornerstone of Microsoft’s productivity ecosystem, providing essential tools for businesses and individuals.
Surface
Hardware and Devices
Premium line of hardware devices, including laptops and tablets.
Showcases Microsoft’s software and services on its own branded hardware, creating a seamless user experience.
Microsoft AI
Artificial Intelligence and Machine Learning
AI and ML technologies and services.
Advances Microsoft’s AI capabilities, infusing AI into its products and empowering businesses with AI-driven solutions.
Key Highlights
Founder and Diversified Portfolio: Microsoft was founded by billionaire Bill Gates and has grown to become one of the largest and most influential companies globally. The company has a diversified portfolio of products and services across multiple industries.
Strategic Acquisitions: Microsoft has strategically acquired prominent companies like LinkedIn, GitHub, and Skype. These acquisitions have played a crucial role in expanding Microsoft’s reach and offerings in various sectors.
Technological Empire: Microsoft’s influence extends across various technological domains, including software development, social media platforms, gaming, and more. Its products and services impact millions of users worldwide.
Software Development: Microsoft is renowned for its software products, such as the Windows operating system and the Microsoft Office suite. These tools are widely used in personal and professional environments.
Social Media Integration: With the acquisition of LinkedIn, Microsoft has ventured into the realm of social media. LinkedIn is a leading professional networking platform that connects millions of professionals globally.
Coding Collaboration: GitHub, another acquisition by Microsoft, is a platform widely used by developers for code collaboration and version control. It has a significant impact on open-source software development.
Communication Solutions: Skype, owned by Microsoft, is a popular communicationplatform that offers voice and video calling, messaging, and conferencing services. It has revolutionized online communication.
Cloud Computing: Microsoft’s cloud computing platform, Azure, provides a range of services, including computing, analytics, storage, and networking. It is widely used by businesses for scalable and flexible solutions.
Gaming Industry: Through its Xbox brand, Microsoft has a strong presence in the gaming industry. Xbox consoles and services cater to gamers worldwide, offering entertainment and online gaming experiences.
Innovation and Impact: Microsoft’s innovative products and services have made a significant impact on individuals, businesses, and industries worldwide. Its influence on technology is pervasive and continues to evolve.
Bill Gates was the co-founder and former CEO of Microsoft until 2000, and he was on the board of Microsoft until 2020. However, over the years, Gates sold various stakes in Microsoft and diversified away from it. As of 2019, Gates had a 1.34% stake in Microsoft, which he might still own, valued at about $25 billion.
Major shareholders comprise co-founder Bill Gates, who stepped down from the company’s board in 2020, which is why these shares are no longer publicly reported. In 2019, Gates still owned a stake of 103 million stocks, which accounted for 1.34% of the company’s ownership (worth over $23 billion in January 2023). Other individual shareholders comprise Satya Nadella, the company’s CEO, Brad Smith (former president), Jean-Philippe Courtois (EVP), and Amy Hood (former CFO).
In 2023, on nearly $212 billion in revenue, Microsoft generated over $72 billion in profits. The company had over $111 billion in liquid assets (which can be easily converted into cash).
Microsoft is among the largest companies on earth, with a diversified portfolio. Owned by billionaire Bill Gates, Microsoft acquired other companies like LinkedIn, GitHub, Skype, and more over the years. Today, Microsoft is a tech empire that spans software, social media, gaming, and more.
In 2023, Google’s search advertising machine, generated over 175 billion dollars. Whereas Microsoft’s Bing generated 12.2 billion dollars. Thus, as of 2023, Google’s search advertising machine is over 14x larger than Microsoft’s search advertising machine.
As of 2023-4, Satya Nadella had 800,667, valued at over $300 million at Microsoft’s current market value. Nadella also got a $2.5 million base salary in 2022, plus $39.23 million in stock awards and over $6.4 million in non-stock incentives, for a total of $48.5 million in 2023. Nadella sold hundreds of millions of dollars of Microsoft stocks in the last ten years, making him a centi-millionaire. In 2023, 95% of Nadella’s salary was performance-based, whereas only about 5% comprised a base salary.
Microsoft’s first acquisition in 1987, Forethought, was the developer of a presentation program that would later become PowerPoint. Since then, the company has made an average of six purchases every year, with fourteen of those exceeding the $1 billion mark. Today’s Microsoft business model spans various segments thanks to an acquisition strategy, which saw Microsoft involved in multiple acquisitions.
Microsoft’s mission is to empower every person and every organization on the planet to achieve more. With over $110 billion in revenues in 2018, Office Products and Windows are still the main products. Yet the company also operates in Gaming (Xbox), Search Advertising (Bing), Hardware, LinkedIn, Cloud, and more.
Microsoft has a diversified businessmodel, spanning from Office to gaming (with Xbox), LinkedIn, search (with Bing), and enterprise services (with GitHub). In 2023, Microsoft made almost $212 billion in revenues, of which almost $80 billion came from Server products and cloud services, and almost $49 billion came from Office products and cloud services. Windows generated $21.5 billion, Gaming generated over $15.4 billion, LinkedIn over $15 billion, and search advertising (through Bing) over $12 billion. Enterprise (GitHub) generated $7.7 billion, and devices (PC) generated $5.5 billion.
Founded in 1975 by Bill Gates and Paul Allen, Microsoft is a revolutionary company in the world of personal computing. The company designs and manufactures software, hardware, operating systems, apps, and devices. Indeed, Windows and Microsoft Office are staples in billions of homes worldwide.
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time, it also became more hierarchical while maintaining its hybrid approach between functions, engineering groups, and management.
OpenAI is an artificial intelligence research laboratory that transitioned into a for-profit organization in 2019. The corporate structure is organized around two entities: OpenAI, Inc., which is a single-member Delaware LLC controlled by OpenAI non-profit, And OpenAI LP, which is a capped, for-profit organization. The OpenAI LP is governed by the board of OpenAI, Inc (the foundation), which acts as a General Partner. At the same time, Limited Partners comprise employees of the LP, some of the board members, and other investors like Reid Hoffman’s charitable foundation, Khosla Ventures, and Microsoft, the leading investor in the LP.
OpenAI has built the foundational layer of the AI industry. With large generative models like GPT-3 and DALL-E, OpenAI offers API access to businesses that want to develop applications on top of its foundational models while being able to plug these models into their products and customize these models with proprietary data and additional AI features. On the other hand, OpenAI also released ChatGPT, developing around a freemium model. Microsoft also commercializes opener products through its commercial partnership.
OpenAI and Microsoft partnered up from a commercial standpoint. The history of the partnership started in 2016 and consolidated in 2019, with Microsoft investing a billion dollars into the partnership. It’s now taking a leap forward, with Microsoft in talks to put $10 billion into this partnership. Microsoft, through OpenAI, is developing its Azure AI Supercomputer while enhancing its Azure Enterprise Platform and integrating OpenAI’s models into its business and consumer products (GitHub, Office, Bing).
Stability AI is the entity behind Stable Diffusion. Stability makes money from our AI products and from providing AI consulting services to businesses. Stability AI monetizes Stable Diffusion via DreamStudio’s APIs. While it also releases it open-source for anyone to download and use. Stability AI also makes money via enterprise services, where its core development team offers the chance to enterprise customers to service, scale, and customize Stable Diffusion or other large generative models to their needs.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
Discover more from FourWeekMBA
Subscribe now to keep reading and get access to the full archive.
