Microsoft passes Apple to become the most valuable company
cnbc.com
cnbc.com
I think balmer got to be the fall guy for a lot of things and that was why he was put in as CEO
Ballmer did start Azure though, which is basically carrying Microsoft today. Their Surface product was also released under Ballmer's direction.
This is analogous to Xerox experimenting with GUI and not really believing in it. No real drive, no zeal. Satya doubled down on it. Made it priority 1 and most importantly executed it well.
Ballmer's world view was completely different which was more rooted in 90s and early 2000s. He was more of Windows guy and not really seeing the changing trends. That is why MSFT's foray into mobile looked like an after thought.
Saying the windows phone was half assed is being generous
IDK if I'd go that far. I used my Windows phone right up to the bitter end of it's ability to function.
The app ecosystem itself sucked, but the platform was IMO better from a sandboxing standpoint, and frankly every Windows Phone 8/10 device I had was better experience from a 'phone' standpoint. Things other than phone/email/music/navigation got bad quick. But I loved them as phones.
I enjoyed using Windows phone.
The UI isn’t even particularly pretty, but in most senses it’s pretty reasonably designed and, very importantly, extremely responsive.
I'm not sure I agree. They needed to get past a Windows-centric mindset just like Intel would have needed to get past an x86-centric one. But it's not clear to me why Microsoft couldn't have built off of a very large developer and user community--and enterprise buyers--to have at least played on a somewhat equal footing to Google and Apple.
Meego, Linux, Qt.
Insanely good developing experience, a decade ahead what iOS or Android had.
It could have been the efficient, user friendly open source rival to the Objective C and Java.
They literally missed the opportunity to make a decent and open phone and it was all by design. They killed Nokia on purpose, right when the N9 was released.
The biggest blame lies on the Nokia management board and the bonus they promised Elop, when he managed to sell the Mobiles business unit.
Fully agree with the development experience though, with C++/CX and .NET Native, with the current state better not even bother, though.
How do you explain Intel completely missing mobile?
Without 80's and 90s Ballmer, Microsoft would be a totally different thing and it's very possible there would not be a Microsoft today. And I don't care for any of these assholes, but he was very important for Microsoft and shaped the industry, like it or not.
- GOOG has grown nearly 300% (last 5 years). It is by far the strongest performing large tech stock this year (>+50%).
- They just announced one of their best quarterly earnings in their history (highest quarterly revenue increase in 14 years).
By these metrics, Sundar seems to have been a great pick. If not for the above metrics, how would you evaluate the CEO?
I haven't been following MSFT closely for a while. What are some of the major decisions that Nadella has made to help create this great success over the past 6-7 years?
It's honestly that simple.
The thing I probably find most impressive is that they have been able to do so well as a business while basically losing mobile--which I'm not sure I would have thought was possible.
That one move by a board directly caused the biggest positive shift in a corporation's fortunes I can think of.
Still, Balmer was driving the company off a cliff with his brutish orthodoxy. Nadella transformed the company based on new assumptions about positioning in the modern digital economy, not the desktop days.
Now the same friends admit that there is a lot improvement in this regard since Satya came on-board.
[1] https://images.squarespace-cdn.com/content/v1/500e2d14e4b042...
Some examples:
He ditched Windows Phone in favor of Android.
Microsoft had built amazing Office apps for iOS but Ballmer refused to allow their release. Nadella green lit them immediately.
He deemphasized Windows releases. Windows 10 was supposed to be the "last" version (no idea what happened after that tbh).
Everything Microsoft has released in the last few years has been cross-platform and cross-browser. This seems obvious now but would have been unthinkable a decade ago.
He doubled/tripled down on Azure.
Internally, he ended inter-division silos and forced teams to cooperate. Lots of old school execs were booted because they refused to give up control of their "kingdom". Engineering teams were also encouraged to use Linux and other non-MSFT tools and to open source their products. Culturally it was big to have an engineer at the helm again rather than a pure business type.
1. Github acquisition: With already dev-tooling play they have, there is a clear strategy here. I think this will serve them well.
2. LinkedIn acquisition: Not sure how it is faring.
3. Friendly relations with open source projects: It improved developer mindshare
- VS Code as gateway drug
- Linux as first class integration
--
I would like to see
- Office on Ubuntu
- Open version of Active Directory
office 365 for large complex excel sheets with bloomberg terminal plugin - nope
MS just tries to embrace, extend and extinguish ubuntu(linux)
They are basically IBM in the 1970s/80s. I give them 20-30 more years and they will become irrelevant.
Linux doesn't need Microsoft help to be extinguished, the GPL haters will take care of that.
I don't see how this was a success. They stopped spending money on creating a new platform, but that's it.
I think it's not so much major decisions that Nadella did right (although he did, with cloud, open source etc.), but small decisions, day in day out for years, to transform the absolute behemoth that Microsoft was into what it is today. Both technologically and culturally. Very few companies of that size have been able to successfully steer their ship in a new direction while not suffering immensly in the process.
Is there a single major tech compagny that has lost valuation?
IBM stock was at it's peak 10 years ago. Sure, now it might seem a bit ludicrous to put MSFT in the same category as IBM, but 10 years ago Microsoft was far from sexy and not part of what people would imagine would be the future of tech (There is a reason there was no M in FAANG when that term appeared). IBM and MSFT where in the same category back then.
Now, since Nadella took over 5 years ago, Microsoft image has completly changed. And over the past 5 years, while all the "FAANG" have increased in value indeed, they have not increased equally.
Microsoft has increased the most, even more than Apple. Who would have bet on that? It has grown about 50% faster than Google and 2x faster than Facebook.
And when you say that they all have increased in value, their is a strong survivorship bias in there, you are only thinking about those companies that are still performing well today. We forget about Nokia, HP, Blackberry etc. That where big back then, but couldn't transform themselves. Just has everyone predicted Microsoft would not be able to.
Worth posting - Microsoft almost passed[1] on Nadella, first during his recruiting interview and later during his CEO interview[2].
[1,2] - in rush now, but will post links later, if someone asks about them. Sorry
I can't think of anything to say in response to this...
In this context, analysts attempt to estimate what sales will be. If analysts had estimated that Apple probably would report sales 49% greater than last year, but Apple reported 47%, the quoted phrase would appear in financial-news articles.
"Analyst expectations" are not expectations in the sense of a parent's potential expectations of their child, but rather their best guess as to what is going to happen.
(a) a strong belief that something will happen or be the case in the future.
(b) a belief that someone will or should achieve something.
The first is a descriptive expectation. A statement about what you think _will be_. The second is a prescriptive expectation. A statement about what you think _should be_.
I think the person is trying to point out that in this context, "expectation" is a descriptive expectation, rather than a prescriptive one.
If you interpreted it as a prescriptive expectation the other meaning of the sentence might be something like "47% is less than the number _desired_ by analysts"
Just hold shares on this.
If you want to fit it into the frame of hedonic expectations, the hedonic equivalent would be ordering and paying for a filet mignon and getting an In N' Out Double-Double. Still delicious, but not what you paid for/expected. The hedonic treadmill has no relation to this concept.
And that's ok. If there was a specific type of service a cloud provider saw that would benefit from the M1 then I'm sure Apple would happily sell it to them.
Apple can make one enterprise foray. Apple can design an "m1" chip for datacenter/server. AWS already doing it for their own servers. Apple shown us they are capable of design a good chip based on ARM. Apple can take their chip design to the enterprise market.
Considering MacOS seems to be an aging spaghetti-BSD under the hood, there's no doubt any serious attempt at the server business would come with Apple submitting patches and documentation to major kernels like any other chip company. AFAIK the M1 architecture can be targeted by Clang and GCC and some people have reversed engineered support for the Linux kernel[1].
> Their own chips may go into servers but probably just for in-house use/services delivered to customers.
Hetzner is already renting Apple M1s[2] ! It was on HN not too long ago. Although it seems aimed at devs who need to test against that environment.
[2]: https://www.hetzner.com/dedicated-rootserver/matrix-apple
https://9to5mac.com/2021/08/25/analysts-google-to-pay-apple-...
Current Apple isn't the kind of company that would do this, but it's not that hard to imagine. Ultimately Apple still prefers to be a hardware company, even their software or services efforts are mostly to encourage people to buy their hardware.
https://www.telegraph.co.uk/technology/2019/07/19/microsoft-...
I imagine at some point in the future (perhaps by 2030) there will be some sort of self-managing set of systems that you can just put on your premises.
There's just too much money to be made for that not to be the case.
Infrastructure is hard, but operations are becoming more and more streamlined.
That's not really the direction Microsoft is going in. Cloud PC (virtual desktop infrastructure) is an Azure only service; there's no on-prem version. Licensing to build it yourself is complex.
They may likely end up with on-prem islands for purchase/rent/whatever, like AWS has, and IBM pioneered in the 60s?
It's kinda crazy to think that Bill Gates would be a trillionaire if he never sold a share.
Mostly because the CEOs all seem so similar. Every time I listen to investor calls of one of them, they are all like "We are proud that we have built tons of great stuff and are excited to build more amazing great stuff.".
I do not see any big bets or different approaches that differentiate the companies.
Can you guys tell me why you would rather invest in one of the big tech companies than the other?
And Google ... we need someone to organize all that publicly available data on earth, right? Well, Google does that.
You know their money doesn't come from organizing the publicly available data, but from organizing all behavior data you generate as you browse all that publicly available data ;-)
I often see mention of his people would never use GC for to keep it trust. E.g is that service or product going to remain available or be deprecated. From what I understand GC had a fairly bad reputation for this.
* Apple builds nice hardware
* Amazon is like a giant online store, they also do some cloud compute hosting on the side (an outgrowth of being a giant online store) and sell some hardware and ads.
* Facebook is...before being Meta, a social media network.
* Google sells ads, they tried the social media thing and it didn't work out. They do some cloud compute hosting, but not as much as Amazon or Microsoft.
* Microsoft does enterprise and consumer software/services.
There is "overlap" but the core business of all these companies is very different (and when they compete, there is usually someone who is much more dominate than the other).
The way I see it, they all build out a different part of the technological landscape. And they all do it in a similar fashion. Since I expect the whole landscape to continue growing, I don't see one being a better investment then the other.
If you are just looking to make money, you would look for value: not the company that will do the best in the future, but the company whose performance in the future is undervalued by other investors (so is not already reflected in its stock price). Most of us don't really have enough extra information (beyond what the market already "knows", and avoiding going to jail for using inside information) to do that very effectively, so you could buy some kind of index fund (perhaps specialized in tech or even bigcorp tech).
Or you could invest in the company whose vision of the future you are most excited about, or something idealistic like that. But that wouldn't really give you influence in the company, nor would it necessarily provide the company with extra capital (since you are most likely just buying from other investors...well, bidding up the stock will still indirectly benefit them).
If you made that investment decision 5 years ago you would have tripled your money already.
Alphabet revenue are 98% based on ads. How do you see the future of ads in the current landscape? If you are bullish then invest away. If not, then does Alphabet has a viable alternative they are investing in for the long term?
Microsoft revenue is a mix of a ton of different things, the biggest of which are cloud, productivity (Office and such), and direct consumer products (Xbox, Windows etc). They are basically selling shovels in the tech-age gold rush. They have just so many different billion dollar revenue streams that they could lose any one of their 3 big businesses and still be ok. But by far their biggest growth driver is Azure for now, how do you feel about that versus the competition?
Apple is all about consumer hardware, as long as they continue delivering best in class product they will be making tons of cash. They are also looking to enter the electric car industry one way or the other, which is potentially a gold mine, do you think they can succeed?
Apart from that, they build phones, run datacenters, develop self driving cars, business software ...
As for Azure, I think Googles cloud business is in the same order of magnitude. I don't see one of them having a long term competitive advantage here.
As for Apple, I think consumer demand in tech will grow just like business demand in tech will grow. And I don't see anyone disrupting Apple either. They will just continue to iterate and grow.
IF some new development appears on the horizon, then it will be interesting how the 3 CEOs will position themselfes. But at the moment, I don't see anything that will disrupt any of these companies.
But none of those have significant impact on their revenues. If ads business tanks for a reason or another (new legislation around privacy, or remake of 2020 Covid-related ad bust), then they tank as well. Cloud revenue is probably one of their biggest non-ad revenue stream, but it's less than ~5% of total revenue.
And Waymo, DeepMind etc, are all moonshots, they currently make 0$, but that's also where the disruption potential could come from. So if you believe in them, that could be a good reason to invest.
> As for Azure, I think Googles cloud business is in the same order of magnitude.
Azure is ~4x bigger than GCP.
Sure. If disruption appears on the horizon in one of the sectors these tech companies are in, then it will get interesting how the CEOs position themselves.
But at the moment I don't see that in any of the sectors. So I don't have an hypothesis to rank Goole/Apple/Microsoft. All three hum away in a similar fashion at the moment.
My point is that they are very different companies, with different ways of making money and different risk profiles. But all with massive growth currently.
So to your question about which one to invest into, then you would make that decision based on which vertical you prefer (ads? service? consumer hardware?) or which one is more risk tolerant.
Or since they don't overlap that much (when just looking at tech), you could invest in all threes. Unlike say, FB and GOOG, which are both suffering from the same risks (but are making different bets for the long term).
I asked about which one you would invest into and your reasoning behind it.
If that's true—of which, respectfully, I am highly skeptical—that doesn't mean they'll be making vast amounts of money.
Most people—like, at least 70% of Americans—can in no way, shape, or form afford hundreds of dollars per month on something like that.
How about doctors? How much visits to a doctor can be made obsolete with an AI companion?
How about entertainment. Americans spend something like $200 per month on entertainment. Maybe your AI companion can entertain you better.
This is very much saying "maybe if you're not already rich, you shouldn't be allowed to get a good job."
And years of your time. With an AI companion, you might have to pay $500/month but maybe you can start working right away. Skipping all those "learning" years.
With an AI companion, all you signal is that you have several hundred a month to spend on an AI companion.
No one's going to give you a loan to get a $500/month "AI companion" for the rest of your life—in part, precisely because it's for the rest of your life.
What you are proposing can not be seen as anything other than a way to ensure that society is permanently stratified by socioeconomic class.
Apple Silicon, TV production, self driving cars, household robots, smart assistants, AR/VR, healthcare.
Every startup out there is meanwhile building a generic enterprise SaaS app with a React front end.
ARM is the future of laptops, and the M1 is amazing. You can't buy, at any price, an ARM laptop that compares to it anywhere else but from Apple and I don't see anybody else able to do it - MS has tried and failed because they don't own the stack well enough that they can get x86 to work.
So I invested in APPL. I haven't invested in Microsoft, because I don't know enough about what they are doing, and won't invest in metabook due to ethics.
Even if Apple has a competitive advantage regarding laptops, I don't see that making Apple a better investmen than Google or Microsoft as they have their areas too where they are best.
It went up from $120 to $180 during Covid. Wait, $230, no, 320, today $483!
Disclosure: I own shares. I’ve paid them less than $30. I knew Atlassian was excellently managed, but I didn’t imagine it would climb this high. I’m surprised it always goes silent next to GAFAM.