Microsoft is the first, why not?

In 20 10, Apple's market value surpassed Microsoft for the first time. The New York Times commented: "This is the beginning of a new era and the end of the old era."

Now, the market value of Microsoft has once again surpassed that of Apple. Can it be considered that this is another turning point of the times?

I thought the same thing.

A fallen giant

People can't reach depth unless they remember.

If you want to know how Microsoft got up, you must first know how it fell.

From 65438 to 0989, Microsoft released the first version of Office, which established its position as a major commercial software company in North America. 1995, Microsoft released Windows95, which is one of the most important products in the history of Microsoft development.

With the help of Office suite and Windows operating system, Microsoft has built a wide enough commercial moat, and its wintel alliance with Intel has created a framework of "closed technology+open standards" for the rising PC market in Ran Ran, which controls the development direction and technical iteration rhythm of the whole industry and "collects taxes" in disguise on a global scale.

As early as 2000, the market value of Microsoft rushed to more than $600 billion, while the market value of Apple, which was established one year later than Microsoft, was less than $20 billion. It was also in this year that the successful Bill Gates chose to retire quickly and handed over this huge technology empire to his college friend Ballmer.

A seemingly ordinary takeover became the first turning point of Microsoft.

2 1 century, Microsoft is still struggling for failure in the field of computer operating system, but the wheel of industrial revolution runs too fast. When Ballmer was still immersed in the PC, Jobs was already brewing to change the world.

The cruelty of the technology industry is that the times never let go of people who are slow to respond.

In 2007, the advent of Android and iOS opened the curtain of the mobile Internet era. Smartphones began to replace computers as a new technology platform, which gave birth to a huge mobile Internet ecosystem. Apple, Google, Facebook (now renamed Meta), Amazon and many other upstarts have stepped onto the historical stage.

In contrast, Microsoft is getting behind the times.

In 2008, Microsoft's revenue was $60.42 billion. By the time Ballmer left office in 20 13, the company's revenue only increased to 77.85 billion US dollars, with an increase of only 28.8% during the period. In the same period, Apple's revenue soared from $32.48 billion in 2008 to $654.38+0.709/kloc-0.00 billion in 2065.438+03, an increase of more than four times. Amazon's revenue increased from 1996 1 100 million dollars to 74.452 billion dollars, Google increased from 21796 million dollars to 59.825 billion dollars, and Facebook more than doubled.

In 20 10, Apple's revenue surpassed Microsoft's, and the market values of the two companies were synchronized. By 20 13, the market value of Microsoft has shrunk to about $300 billion, and Apple has continued to make great strides after surpassing Microsoft.

A leader is a barometer of the rise and fall of a company.

Ballmer can't be blamed for Microsoft's death, but he can't escape responsibility. For smart phones, Ballmer once believed that the iPhone had no chance to gain a large market share in the market. In an instant, Microsoft deviated from the main channel of the times.

The golden growth period of an industry and a technology is only a few years. Grab it if you can. If you can't catch it, throw it away. When Microsoft wants to turn over, it will be too late. 20 13' s acquisition of Nokia is Ballmer's swan song at Microsoft. On the day of leaving office, Microsoft's share price rose by 7%, and Wall Street wrote a conclusion for Ballmer's administration with real money.

In 20 17, the market value of Microsoft returned to the $600 billion mark, and it has been 18 years since the company first achieved this goal. Taking this as a symbol, Microsoft's share price caught up with the high-speed rail.

On October 29th, US local time 10/kloc-0, Microsoft surpassed Apple (with a market value of $2.46 trillion) and regained the throne of the world's highest listed company with a market value. The root of all this was an unexpected financial report.

According to the financial report, Microsoft's total revenue in the first fiscal quarter (July-September, 20021year) was 45.3 billion US dollars, up 22% year-on-year, the largest single-quarter increase since 20 14 years. The net profit was $20.5 billion, up 48% year-on-year, which was the first time that the company's profit in a single quarter exceeded $20 billion.

The energy of the strong

An Indian contributed to the rebirth of Microsoft.

In 20 14, Nadella succeeded Ballmer and became the third generation head of Microsoft.

As the first generation of Indian immigrants in Silicon Valley, Nadella studied at the University of Wisconsin and the University of Chicago, and joined Microsoft on 1992 after graduation. As a veteran, he witnessed the rise and fall of Microsoft, and the outside world gave him an evaluation: an insider with an outsider's vision.

After Nadella took office, Microsoft carried out drastic reforms from top to bottom and from the inside out, and the first step of reform was the adjustment of ideological line.

In the era of Ballmer, Microsoft inherited Bill Gates' idea of "running Microsoft software on every computer", while Nadella changed his creed to "let everyone and every organization in the world make extraordinary achievements".

Compared with locking itself in a limited ecological fence before, Nadella's Microsoft began to embrace the world again.

Only eight weeks after taking Office, Nadella launched the first version of Office suite specially built for Apple iPad, and then unexpectedly allowed Office to enter mobile platforms other than Windows, and launched Windows 10 for the first time in a free way.

Ballmer regarded open source technology as a cancer of technical property rights, while Nadella chose compatibility, which not only reopened Microsoft account on the open source community GitHub, but also completed the acquisition of GitHub on 20 18.

Once an opponent, now a friend.

In Nadella's idea, the final result of Microsoft should not be a vertical development company that builds a product line around Windows, but an enterprise that provides productivity expansion. Projected on the adjustment of product line, it is to gradually give up the dependence on Windows operating system and establish the core strategy of "mobile first, cloud first".

The reason why Microsoft established the idea of turning to the cloud is also directly related to Nadella's experience.

20 10, Nadella was appointed as the head of the set-top box department. At that time, the department had begun to develop cloud service projects, and the team code was "Red Dog", which was the predecessor of Azure, which Microsoft relied most on at present.

In order to cooperate with the overall strategic transformation, Microsoft cut off the "chicken rib" Nokia mobile phone department and cut costs through mass layoffs. In 20 15, Microsoft merged the original five departments into three departments. In 20 18, it was announced that the Windows division was abolished, and the "Experience and Equipment" department and the "Cloud and Artificial Intelligence" platform were established.

From 20 16 to 2020, Microsoft's business in intelligent cloud has increased from $25.04 billion to $48.37 billion, among which Azure, the core product of cloud computing, has shown a strong explosive growth. In the first quarter of this year, Azure and other cloud computing services increased by 50%, far exceeding the expectations of Wall Street analysts.

Nadella awakened Microsoft, who was sleeping in the dream of the PC era. This is another self-salvation of the technology industry after Guo Shina saved IBM in 1990s.

The clock can go back to the origin, but not yesterday.

The king of Microsoft has returned, but it is no longer the familiar Microsoft that makes money by operating system and office software.

According to the latest financial report, in fiscal year 2022, Q 1, the operating income of the company's intelligent cloud section reached $654.38+07 billion, which became the biggest performance pillar, while the operating income of the personal computing section including Windows system, search and games was only $654.38+03 billion.

In 20 16, the revenue of smart cloud and personal computing accounted for 27% and 44% respectively, but now, this figure has become 33% and 29%.

Microsoft under Nadella has not been overthrown, but it is back.

The mirror of history

Who is the future global market value brother?

After the market value of Microsoft surpassed that of Apple, there was a lot of analysis on this result, but it was generally accepted that Apple's supply chain was under pressure and Microsoft's online business benefited from the epidemic.

In the short term, this is indeed an unavoidable factor, but in the longer term, it is not the main contradiction.

The situation of Apple and Microsoft is easily reminiscent of a line in "A Generation of Masters": "People live for a lifetime, and ability is second. Some people have become faces, and some people have become lining, all of which are caused by the times. "

As the two largest technology giants on the earth, they have done their best in their respective fields. The final result of the competition between the two companies does not depend on themselves, but on the fate of their industries.

History is a mirror through which we can better understand ourselves.

For example, today's Apple is very similar to Microsoft 20 years ago, and Microsoft is also very similar to Apple 10 years ago.

Apple, like Microsoft 20 years ago, is first manifested in its strong industrial discourse power and dominance.

With the advantage of market share, it leads the development direction of the whole industrial chain and forces the upstream to upgrade its technology through strict requirements. Under Cook's leadership, Apple can not only "support" suppliers, but also "cheat" new lovers and abandon old ones at any time.

In the 1990s, Microsoft and Intel once occupied more than 90% of the PC market, and they jointly controlled the development direction and technical iteration rhythm of the entire PC industry chain. Upstream enterprises, including chip suppliers, must plan their own development routes according to the rhythm of the two giants.

This dominant position is similar, but the greater similarity is reflected in the industrial environment it faces.

At present, the smart phone headed by Apple has entered the final stage of innovation, and it is facing the iteration and challenges of new computing terminal platforms such as VR/AR at any time.

Global smartphone shipments fell unilaterally after peaking in 20 17, and have not stopped falling so far. On the other hand, VR is about to usher in the singularity of 10 million units. One day in the future, the next generation computer terminal platform may complete the update iteration faster than expected, and Apple is likely to face the embarrassment of Microsoft, just like everything that happened after the smartphone was connected to the PC.

In contrast, Microsoft Card's cloud computing is in the ascendant, much like smart phones more than a decade ago.

According to IDC data, cloud computing is one of the fastest growing racetracks in the field of science and technology. It is estimated that the market scale will expand from 706.6 billion US dollars in 20021year to 0.3 trillion US dollars in 2025.

According to Gartner's data, in 2020, the global cloud computing market will continue to maintain rapid growth, and the IaaS market scale will reach 64.286 billion US dollars, up 40.7% year-on-year. Amazon, Microsoft and Ali rank in the top three, and the market is still further concentrated in the head.

Microsoft is feeling better and better in the competition with Amazon's cloud computing. At present, the growth rate of 36% is much higher than the overall growth rate of 28% in the cloud industry, indicating that the company's market share is constantly improving.

Apple's recent stock price downturn is inseparable from the anti-monopoly investigation suffered by the company. This situation, Microsoft also felt the same way 20 years ago.

In the 1990s, Microsoft became the target of antitrust agencies after it became bigger. 1in may, 1998, the U.S. federal department of justice and the attorneys general of 20 States initiated anti-monopoly litigation against Microsoft, which was once split.

Now, Apple has also been targeted by antitrust agencies. On September 10, the verdict of Epic v. Apple Monopoly came out, demanding that Apple App store lift the restrictions on the third-party payment system. In addition, countries around the world have also begun to organize hunting for apples.

In the past few decades, with the ebb and flow of science and technology industry, many forces took turns to lead the way, but after all, they could not surpass the law of talents going abroad.

In 20 10, Apple's market value surpassed Microsoft for the first time. The New York Times once commented: "This is the beginning of a new era and the end of the old era."

Now is undoubtedly a new turning point, not that Microsoft created the times, but that the times chose Microsoft.

After 20 18, Microsoft's market value has challenged Apple three times, and the first two times were short-lived. The low margin of safety caused by Microsoft's high valuation is an important factor.

In the past two years, the rapid release of Microsoft's performance has continuously narrowed the valuation difference between the two, laying the foundation for this counterattack.

Microsoft is the first, and it should be stable this time.

The content of this article concerning listed companies is the author's personal analysis and judgment based on the information publicly disclosed by listed companies according to legal obligations (including but not limited to temporary announcements, periodic reports, official interactive platforms, etc.). ); The information or opinions in this article do not constitute any investment or other business advice, and market value observation is not responsible for any actions arising from the adoption of this article.

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