Microsoft Corporation at a Glance

Uppers

  • Excellent  benefits, perks and compensation packages
  • Good work environment and many opportunities to work on latest technology
  • Very strong résumé presence

Downers

  • Big company bureaucracy and office politics

The Bottom Line

  • Microsoft has a well-earned reputation as a top employer and top firm in its field.

About Microsoft Corporation

Microsoft is omnipresent. Its Windows operating system and Office suite of productivity software dominate their markets. The company's cloud computing platform, Azure, is one of the leaders in that burgeoning market. Millions of people interact on LinkedIn, the business-oriented social network. Microsoft's customers range from individuals and small businesses to the world's biggest companies and government agencies. Microsoft makes tablets (Surface), game consoles (Xbox), and even laptop computers, and it also owns Skype, the video meeting service. Geographically, Microsoft's revenue is evenly split between the US and the other countries.

Operations

Microsoft operates three business segments: More Personal Computing Productivity and Business Processes, and Intelligent Cloud.

The More Personal Computing segment generates about 40% of revenue by selling products and services for end users, developers, and IT managers across devices. Included are Windows OS products; devices, including the Surface tablet, phones, and PC accessories; gaming such as Xbox hardware and Xbox Live; video games; HoloLens virtual reality technology; and third-party video game royalties; and search advertising.

The Productivity and Business Processes segment, about 35% of sales, covers productivity, communication, and information products and services across devices and platforms. Among the products are Office, Office 365 (the cloud version), Exchange, SharePoint, Skype and Skype for Business, and the Dynamics ERP and CRM products. Microsoft Office has been productive for the company, accounting for about a quarter of total revenue. LinkedIn is part of the segment.

The Intelligent Cloud segment, about 30% of revenue, consists of its public, private, and hybrid server products and cloud services. Products and services include SQL Server, Windows Server, Visual Studio, System Center, and Azure.

Geographic Reach

Microsoft, headquartered in Redmond, Washington, operates in some 190 countries. Sales are balanced between the US, which accounts for 51% of revenue, and other countries, which provide the balance of sales.

Internationally, Microsoft operates research and development centers in China and India; data centers in Ireland, Singapore, and the Netherlands; and operations and facilities in Ireland, and the UK. The company also has offices in India, China, France, Canada, Australia, Germany and Japan.

Sales and Marketing

As befits an omnipresent company, Microsoft sells through multiple channels to a wide range of customers. It sells online and through OEMs, distributors, and resellers, as well as retailers. Maintaining its brand identity and keeping itself in front-of-mind for potential consumer and commercial buyers is a key strategy to ongoing sales, and to that end the company spends about $17 billion annually on sales and marketing activities. Customers include individual consumers, small and medium organizations, large global enterprises, public-sector institutions, internet service providers, application developers, and OEMs.

Financial Performance

Microsoft's revenue has trended higher in recent years, with growth averaging about 2% a year from 2014-2017. Revenue jumped 14% to $110.3 billion in 2018 (ended June), an increase of nearly $14 billion from 2017. Each of the company's segments reported higher sales, led by the Productivity and Business Processes unit (LinkedIn and Office), which provided nearly half of the total increase. Server products and cloud services added about $4.5 billion to the year-to-year increase, driven by a 90% jump in the company's Azure cloud services' revenue. Revenue from More Personal Computing and Gaming rose 8% and 14%, respectively.

Microsoft reported net income of $16.5 billion in 2018, down $9 billion from 2017. The biggest factor was a tax bill that was $9 billion higher in 2018 due to the US Tax Cuts and Jobs Act of 2017. Income before taxes was $36.4 billion in 2018 compared to $29.9 billion in 2017.

The company held $11.9 million in cash and cash equivalents in 2018, $4.3 billion higher than in 2017. In 2018, the company generated $43.8 billion from operations and used $33.6 billion for financing activities and about $6 million in investing activities.

Strategy

Microsoft isn't just on the desktop anymore and it's not just for PCs, either.

From its Azure cloud computing operations to its Surface tablets (and now Surface Book notebook computer), the company is planting its flag in the cloud and mobile. Cloud customers are attracted by the stability of Microsoft products (and the company itself) as well as the industries -- such as health care -- that Microsoft's customers are in. Microsoft competes with Amazon's Amazon Web Services and Google in cloud services, a fight that has seen prices drop as services increase. Microsoft keys on the capability of its public cloud to integrate with customers' hybrid and private clouds.

Microsoft also has adapted its software for other devices such as those that run on the Apple iOS and the Android OS from Google. The Office 365 is a cloud-based version of its Office productivity suite; its consumer client base now numbers 27.0 million. Google with its corps of online business tools provides stiff competition for Microsoft in the office productivity category.

The company continues to depend on PC makers such as Dell, HP, and Lenovo to load its software on their computers. That means not only the operating system, but Office as well. Microsoft's notebook computer is a direct competitor with similar products of its customers.

In the phone business, Microsoft shifted its focus toward providing software rather than hardware. It sold its feature phone business to Hon Hai/Foxconn Technology Group, and HMD Global, a deal that included manufacturing facilities in Vietnam. Without the entry-level class of phones, Microsoft continues with Windows 10 Mobile and the Lumia line of phones and those from OEM partners Acer, Trinity, and VAIO.

Mergers and Acquisitions

In 2018 Microsoft agreed to buy GitHub, a software code sharing and collaboration service, for $7.5 billion. About 28 million software developers post code on GitHub, which is the largest source of software code (much of it open source) in the world. GitHub is to operate independently.

Other 2018 acquisitions included Lobe, Bonsai, FlipGrid, Ninja Theory, Undead Labs, Playground Games, Compulsion Games, Semantic Machines, Chalkup, PlayFab Inc., and Avere Systems.[CRM1] 

In June 2017 Microsoft moved to bolster the security of its enterprise software by acquiring Hexadite. The company develops tools for automatically investigating security incidents and remedying them. Microsoft expects Hexadite's products to strengthen and extend its enterprise security offerings. The price was reported to be about $100 million.

Microsoft in April 2017 bought Deis, a startup software company, to aid in its competition with Amazon Web Services and Google to provide cloud services. Deis provides open-source software that helps companies build applications on top of cloud services. With Deis, Microsoft seeks to make it easier for developers to write applications for its Azure cloud services. Terms of the deal were not disclosed.

Other 2017 deals included Cloudlyn, Swing Technologies, AltspaceVR, Cycle Computing, International Software, Open Build Service, Donya Labs, and Maluuba.[CRM2] 

The 2016 acquisition of LinkedIn adds to Microsoft's services and deepens capability to compete with relationship-oriented software providers such as Salesforce.com. At $26 billion it was Microsoft's biggest acquisition. LinkedIn will operate as an independent subsidiary of Microsoft with the same management. That said, Microsoft and LinkedIn intend to integrate a number of their products. For example, people drafting their résumés in Microsoft's Word can update their LinkedIn profiles and find and apply for jobs there. LinkedIn Learning will be available in Office 365 and the Windows ecosystem.

 

Company Background

Bill Gates and Paul Allen founded Microsoft (originally named Micro-soft) in 1975 after Gates dropped out of Harvard at age 19 to sell a version of the programming language BASIC. While Gates was at Harvard, the pair wrote the language for Altair, the first commercial microcomputer. The company was born in Albuquerque, New Mexico and grew by modifying BASIC for other computers.

Gates and Allen moved Microsoft to their native Seattle in 1979 and began developing software that let others write programs. The modern PC era dawned in 1980 when IBM chose Microsoft to write the operating system for its new machines. Although hesitant at first, Gates bought QDOS, short for "quick and dirty operating system," for $50,000 from a Seattle programmer, renaming it the Microsoft Disk Operating System (MS-DOS).

Allen fell ill with Hodgkin's disease and left Microsoft in 1983. In the mid-1980s Microsoft introduced Windows, a graphics-based version of MS-DOS that borrowed from rival Apple's Macintosh system. The company went public in 1986, and Gates became the industry's first billionaire a year later. Microsoft introduced Windows NT in 1993 to compete with the UNIX operating system, popular on mainframes and large networks.

The early 1990s brought monopoly charges from inside and outside the industry. In 1995 antitrust concerns scotched a $1.5 billion acquisition of personal finance software maker Intuit.

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Microsoft Corporation

1 Microsoft Way
Redmond, WA 98052-8300
Phone: 1 (425) 882-8080
Fax: 1 (800) 546-7516

Stats

  • Employer Type: Public
  • Stock Symbol: MSFT
  • Stock Exchange: NASDAQ
  • CEO: Satya Nadella
  • President and Chief Legal Officer: Bradford L. Smith
  • Chairman: John W. Thompson
  • 2018 Employees: 131,000

Major Office Locations

  • Redmond, WA

Other Locations

  • Birmingham, AL
  • Bentonville, AR
  • Scottsdale, AZ
  • Tempe, AZ
  • Tucson, AZ
  • Aliso Viejo, CA
  • Corte Madera, CA
  • Costa Mesa, CA
  • Irvine, CA
  • Los Angeles, CA
  • Mission Viejo, CA
  • Mountain View, CA
  • Palo Alto, CA
  • Playa Vista, CA
  • Redondo Beach, CA
  • Sacramento, CA
  • San Diego, CA
  • San Francisco, CA
  • Santa Clara, CA
  • Sunnyvale, CA
  • Boulder, CO
  • Broomfield, CO
  • Denver, CO
  • Fort Collins, CO
  • Farmington, CT
  • Washington, DC
  • Newark, DE
  • Fort Lauderdale, FL
  • Jacksonville, FL
  • Orlando, FL
  • Tampa, FL
  • Wilton Manors, FL
  • Alpharetta, GA
  • Atlanta, GA
  • Des Moines, IA
  • Bloomington, IL
  • Chicago, IL
  • Downers Grove, IL
  • Evanston, IL
  • Northlake, IL
  • Oak Brook, IL
  • Schaumburg, IL
  • Indianapolis, IN
  • Overland Park, KS
  • Metairie, LA
  • Andover, MA
  • Boston, MA
  • Burlington, MA
  • Cambridge, MA
  • Natick, MA
  • Bethesda, MD
  • Chevy Chase, MD
  • Bloomington, MN
  • Edina, MN
  • Saint Louis, MO
  • Charlotte, NC
  • Durham, NC
  • Fargo, ND
  • Omaha, NE
  • Salem, NH
  • Bridgewater, NJ
  • Iselin, NJ
  • Shamong, NJ
  • Wayne, NJ
  • Reno, NV
  • Hauppauge, NY
  • Huntington Station, NY
  • New York, NY
  • White Plains, NY
  • Beachwood, OH
  • Cincinnati, OH
  • Cleveland, OH
  • Columbus, OH
  • Mason, OH
  • Tulsa, OK
  • Lake Oswego, OR
  • Portland, OR
  • Wilsonville, OR
  • Harrisburg, PA
  • King Of Prussia, PA
  • Malvern, PA
  • Mechanicsburg, PA
  • Pittsburgh, PA
  • Memphis, TN
  • Murfreesboro, TN
  • Nashville, TN
  • Austin, TX
  • Houston, TX
  • Irving, TX
  • San Antonio, TX
  • Arlington, VA
  • Bristow, VA
  • Glen Allen, VA
  • Reston, VA
  • Bellevue, WA
  • Issaquah, WA
  • Kirkland, WA
  • Quincy, WA
  • Sammamish, WA
  • Seattle, WA
  • Tukwila, WA
  • Venice, WA
  • Woodinville, WA
  • Madison, WI
  • Waukesha, WI
  • Cheyenne, WY
  • Belo Horizonte, Brazil
  • Brasilia, Brazil
  • Curitiba, Brazil
  • Porto Alegre, Brazil
  • Rio De Janeiro, Brazil
  • Sao Paulo, Brazil
  • Calgary, Canada
  • Edmonton, Canada
  • Halifax, Canada
  • Montréal, Canada
  • Ottawa, Canada
  • Québec, Canada
  • Toronto, Canada
  • Vancouver, Canada
  • Victoria, Canada
  • Winnipeg, Canada
  • Santiago, Chile
  • Bogota, Colombia
  • Santo Domingo, Dominican Republic
  • Espoo, Finland
  • Salo, Finland
  • Tampere, Finland
  • Aix En Provence, France
  • Lille, France
  • Lyon, France
  • Marseille, France
  • Nantes, France
  • Neuilly Sur Seine, France
  • Oberhausbergen, France
  • Ramonville-Saint-Agne, France
  • Villebon Sur Yvette, France
  • Bengaluru, India
  • Chandigarh, India
  • Chennai, India
  • Gurgaon, India
  • Hyderabad, India
  • Indore, India
  • Kolkata, India
  • Mumbai, India
  • New Delhi, India
  • Pune, India
  • Chofu, Japan
  • Fukuoka, Japan
  • Hiroshima, Japan
  • Kawaguchi, Japan
  • Nagoya, Japan
  • Osaka, Japan
  • Sapporo, Japan
  • Sendai, Japan
  • Astana, Kazakhstan
  • Porto, Portugal
  • Chelyabinsk, Russia
  • Ekaterinburg, Russia
  • Kaliningrad, Russia
  • Kazan, Russia
  • Kemerovo, Russia
  • Khabarovsk, Russia
  • Krasnodar, Russia
  • Krasnoyarsk, Russia
  • Nizhni Novgorod, Russia
  • Novosibirsk, Russia
  • Orenburg, Russia
  • Rostov-On-Don, Russia
  • Samara, Russia
  • Ufa, Russia
  • Vladivostok, Russia
  • Volgograd, Russia
  • Seoul, South Korea
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