Microsoft’smission is to empower every person and every organization on the planet to achieve more. In 2021, Microsoft made over $168 billion in revenues, with Office Products and Windows as still the main products. Yet the company also operates in Gaming (Xbox), Search Advertising (Bing), Hardware, LinkedIn, Cloud, and Enterprise (GitHub).
Aspect
Description
Analysis
Mission Statement
Empower every person and organization on the planet to achieve more.
Microsoft’s mission emphasizes inclusivity, global impact, and enabling individuals and businesses to excel.
Revenue Streams
Generated over $168 billion in 2021 from diverse sources, including Office, Windows, Xbox, LinkedIn, Bing, and more.
Microsoft’s revenue diversification minimizes risk and ensures stability even in evolving markets.
Customer-Centric Approach
Tailors solutions for small businesses (productivity), large businesses (competitiveness), and the public sector (efficiency).
A customer-focused approach helps Microsoft address specific needs and deliver tailored value propositions.
Strategic Priorities
Focuses on reinventing productivity, building an intelligent cloud platform, and creating more personal computing experiences.
These priorities align with market trends and emerging technologies, ensuring Microsoft’s future relevance.
CEO’s Vision
Emphasizes customer trust, alignment of business interests with customers’, and creating value across diverse industries.
Satya Nadella’s vision highlights the importance of customer-centricity and long-term partnerships.
Resilient Evolution
Successfully adapted and thrived despite past losses by innovating and adopting new business models.
Microsoft’s ability to evolve and diversify demonstrates agility and resilience in the face of industry changes.
Cloud Transition
Shifted towards cloud computing, with the Microsoft Cloud generating over $23 billion in revenue in 2021.
The focus on the cloud aligns with the growing demand for digital services and positions Microsoft as an industry leader.
GitHub’s Role
Critical in the cloud transition, attracting developers, start-ups, and enterprises for unified development platforms.
GitHub’s integration enhances Microsoft’s developer ecosystem and strengthens its cloud offerings.
Digital Advertising
Presence in digital advertising through Bing and LinkedIn, facing competition from dominant players like Google and Facebook.
Microsoft’s presence in advertising diversifies its revenue, although it competes with industry giants.
Diversified Business Model
Offers a wide range of products and services, enhancing resilience and relevance across industries.
Diversification mitigates dependence on specific markets and positions Microsoft for sustained growth.
Future Focus
Committed to trust in technology, customer privacy, cybersecurity, ethical AI, and reflecting diverse customer values.
Future-oriented priorities address critical industry concerns, fostering trust and responsible innovation.
Global Impact
Extends mission to create local impact, growth, and opportunity worldwide, contributing to global progress.
Microsoft’s global reach enables it to make a meaningful difference in communities and economies globally.
We strive to create local opportunity, growth, and impact in every country around the world. Our platforms and tools help drive small business productivity, large business competitiveness, and public-sector efficiency. They also support new startups, improve educational and health outcomes, and empower human ingenuity.
That makes clear that Microsoftvalue proposition moves around three key customers and for each of those it offers a different benefit:
Small business: productivity.
Large business: competitiveness.
Public-sector: efficiency.
To achieve its mission and vision, Microsoft looks at three prerogatives:
Reinvent productivity and business processes.
Build an intelligent cloud platform.
Create more personal computing.
Microsoft today has a diversified business model that relies on several units and revenue streams.
From its classic office products for PC and Windows to gaming, professional networking (LinkedIn), search advertising (Bing) and more.
Microsoft has a diversified business model, 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.
Satya Nadella, Microsoft’s CEO emphasized the full transition of Microsoft, in the 2018 Shareholders’ letter:
In sum, our platforms create broad surplus everywhere, from the farmer who is able to apply precision agriculture to conserve resources and increase yields, to the hospital that is able to lower the cost of healthcare and improve patient outcomes, to the largest companies of the world reaching new customers in new markets.
And he continued:
At a time when digital technology is transforming every industry and every part of our daily life and work, our customers are increasingly looking for a partner whose business interests are fundamentally aligned with their own. At Microsoft, our customers’ interests are core to our success. That is what engenders trust.
Microsoft got founded in 1975, and it has been able to remain a relevant company, which not only managed to keep up with new tech innovations and business models, but it also kept growing at a steady rate by investing in other areas.
And while Microsoft didn’t win the search war (Google dominated the market), the smartphone war (Apple took over the market), and the social media war (Facebook dominated that industry) it still survived to them, and built a successful business unit in each of those new industries, driven by new business models.
As Satya Nadella pointed out in the 2018 Shareholders’ Letter:
We will continue to create local opportunity, growth and impact in every community and country around the world. We will continue to invest in the largest growth opportunities and innovate boldly to serve our customers. We will continue to help our customers build digital capability, so they can grow and thrive — today and long into the future.
He also closes with a critical remark, for which a few tech companies have realized the need to emphasize more in terms of value proposition:
We will continue to work to instill trust in technology across everything we do, to advocate for customer privacy, drive industry-wide cybersecurity initiatives and champion ethical AI. And we will continue to transform our culture to reflect the diverse customers we serve around the world, while holding fast to our timeless values.
Privacy, cybersecurity, and ethical AI are concerns that might shape technology in the next decades!
In 2022, Satya Nadella highlighted how Microsoft had fully transitioning to become a key player in the cloud business:
It was a record third quarter, driven by the continued strength of the Microsoft Cloud, which surpassed $23 billion in revenue, up 32% year over year. Going forward, digital technology will be the key input that powers the world’s economic output. Across the tech stack, we are expanding our opportunity and taking share as we help customers differentiate, build resilience, and do more with less.
It’s important to understand how GitHub has been critical to this transition:
GitHub usage is increasing among both independent developers and start-ups as well as the world’s most established enterprises. 90% of the Fortune 100 use GitHub. In fact, Mercedes-Benz, for example, is using GitHub Enterprise to provide a unified development platform for more than 20,000 employees to build, ship, and maintain software.
It’s also critical to look at how the digital advertising industry is getting reshaped.
As Microsoft, with Bing and LinkedIn has also an important presence there:
The digital advertising industry has become a multi-billion industry dominated by a few key tech players. The industry’s advertising dollars are also fragmented across several small players and publishers across the web. Most of it is consolidated within brands like Google, YouTube, Facebook, Instagram, Amazon, Bing, Twitter, TikTok, which is growing very quickly, and Pinterest.
Within this market, the most significant players are companies like Google and Facebook.
Yet, new players like TikTok are growing very quickly, stealing important market shares from Facebook ads machine.
And also Amazon and Apple are pushing into this industry.
Microsoft has a diversified business model spanning across Office products, Windows, Gaming (Xbox), Search Advertising (Bing), Hardware, LinkedIn, Cloud, and more.
Key Highlights
Mission Statement: Microsoft’s mission is to empower every person and organization on the planet to achieve more. The company focuses on local opportunities, growth, and impact worldwide.
Diverse Revenue Streams: Microsoft generated over $168 billion in 2021, with revenue sources from Office products, Windows, Gaming (Xbox), LinkedIn, search advertising (Bing), and more.
Customer-Centric Approach: Microsoft’s value proposition caters to different customer segments: small businesses (productivity), large businesses (competitiveness), and the public sector (efficiency).
Strategic Priorities: The company’s three strategic priorities are reinventing productivity and business processes, building an intelligent cloud platform, and creating more personal computing experiences.
CEO’s Vision: Satya Nadella emphasizes customer trust, aligning business interests with customers’, and creating value across diverse industries.
Resilient Evolution: Despite losing in search, smartphone, and social media markets, Microsoft evolved and succeeded in various industries through innovation and new business models.
Cloud Transition: Microsoft’s shift towards cloud computing led to significant growth. The Microsoft Cloud generated over $23 billion in revenue, emphasizing differentiation, resilience, and efficiency for customers.
GitHub’s Role: GitHub played a critical role in Microsoft’s cloud transition, finding increased adoption among developers, start-ups, and enterprises for unified development platforms.
Digital Advertising: Microsoft has a presence in the digital advertising industry through Bing and LinkedIn, but the market is dominated by players like Google and Facebook. Emerging players like TikTok, Amazon, and Apple are reshaping the industry.
Diversified Business Model: Microsoft’s business model encompasses a wide range of products and services, ensuring its relevance and growth across industries.
Future Focus: Microsoft’s CEO emphasizes trust in technology, advocating customer privacy, driving cybersecurity initiatives, championing ethical AI, and reflecting diverse customer values.
Global Impact: Microsoft’s mission extends to creating local impact, growth, and opportunity across communities and countries worldwide.
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 business model, 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.
Adidas’ mission is “To be the best sports brand in the world.” Adidas AG is a German multinational initially founded in 1924 by Adolf Dassler who developed spiked running shoes out of his mother’s house. Today, the company is the largest sportswear producer in Europe and the second largest globally behind rival Nike.
Tesla’s vision is to “create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles,” while its mission is “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” Tesla used a transitional business model as its ecosystem grows.
Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.”
Apple’s mission is “to bring the best user experience to its customers through its innovative hardware, software, and services.” And in a manifesto dated 2019 Tim Cook set the vision specified as “We believe that we are on the face of the earth to make great products and that’s not changing.”
Netflix’s core mission, strategy, and vision are that of “improving its members’ experience by expanding the streaming content with a focus on a programming mix of content that delights members and attracts new members.”
Coca-Cola’s Purpose is to “refresh the world. make a difference.” Its vision and mission are to “craft the brands and choice of drinks that people love, to refresh them in body & spirit. And done in ways that create a more sustainable business and better-shared future that makes a difference in people’s lives, communities, and our planet.”
Starbucks highlights its mission as “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” And its vision is to “treat people like family, and they will be loyal and give their all.”
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.
Walmart’smission can be summarized as “helping people around the world save money and live better – anytime and anywhere – in retail stores and through eCommerce.” While its vision is to “make every day easier for busy families.” Walmart defines “busy families” as the bull’s eye of its business strategy.
Nike vision is “to bring inspiration and innovation to every athlete in the world.” While its mission statement is to “do everything possible to expand human potential. We do that by creating groundbreaking sport innovations, by making our products more sustainably, by building a creative and diverse global team and by making a positive impact in communities where we live and work.”
Google mission statement is to “organize the world’s information and make it universally accessible and useful.” Its vision statement is to “provide an important service to the world-instantly delivering relevant information on virtually any topic.” In 2019, Sundar Pichai emphasized a renewed mission to allow people “to get things done!”
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.
