Look at Microsoft p/e, eps, divy
I rate a buy at 41
AP
In the span of six days, Microsoft's new
CEO Satya Nadella has totally shaken up
the company.
First, he announced Office for iPad,
releasing a touch version of Office for
Apple's tablet before Microsoft had a
touch version of Office for Windows.
Then during Build, Microsoft's conference
for developers, Microsoft announced that
Windows would be free for all devices
with nine-inch or smaller screens.
Basically, Windows is free to tablet and
phone makers, just as Android is free to
device makers. Really, Windows is more
free than Android, since nearly every
Android device maker has to pay a patent
license fee to Microsoft.
In between those two announcements,
Nadella enacted a mini-reorg at
Microsoft, shuffling the executive
ranks.
These are major changes for Microsoft.
For years, analysts and pundits have been
telling Microsoft that its business model
would not work for phones and tablets. In
the past, Microsoft charged computer
makers about $100 for a Windows license.
For phones it was charging less, between
$15 and $20.
With Google producing a more popular
operating system and charging nothing for
it, there was little incentive for a
phone maker to use Windows. The same
thing applied to tablets.
But in Microsoft's world, it made no
sense to give away its software. It's not
an advertising company like Google.
Google makes money when you use the
Internet; Microsoft makes money when you
pay for its software.
Now, with Windows free, Microsoft is
going to try to make money on services
and other software that comes with
Windows. It's a risk, but the alternative
is watching Android completely take over
the planet.
Just as people have been telling
Microsoft to give away its software,
they've been begging Microsoft to get
Office on the iPad. Analysts estimate it
could generate billions in revenue.
Even if it doesn't generate billions,
it's important for the future of
Microsoft. A whole generation of computer
users growing up on tablets could get
used to the idea of going without
Office.
Credit for these decisions should not
accrue solely to Nadella. Former CEO —
and media punching bag — Steve Ballmer
set much of this in motion before he
left.
But Nadella is a considerably different
leader at Microsoft. He's less bombastic.
He's a little boring, frankly. But that's
OK: not every executive needs to light up
the stage.
What Nadella has said during both his
presentations this week seemed more
realistic. Nadella says Microsoft is no
longer the dominant force, and that it
needs to act like a hungry startup.
With these changes, it's not just talk
from Nadella. Microsoft is acting like a
different company.
I rate a buy at 41
AP
In the span of six days, Microsoft's new
CEO Satya Nadella has totally shaken up
the company.
First, he announced Office for iPad,
releasing a touch version of Office for
Apple's tablet before Microsoft had a
touch version of Office for Windows.
Then during Build, Microsoft's conference
for developers, Microsoft announced that
Windows would be free for all devices
with nine-inch or smaller screens.
Basically, Windows is free to tablet and
phone makers, just as Android is free to
device makers. Really, Windows is more
free than Android, since nearly every
Android device maker has to pay a patent
license fee to Microsoft.
In between those two announcements,
Nadella enacted a mini-reorg at
Microsoft, shuffling the executive
ranks.
These are major changes for Microsoft.
For years, analysts and pundits have been
telling Microsoft that its business model
would not work for phones and tablets. In
the past, Microsoft charged computer
makers about $100 for a Windows license.
For phones it was charging less, between
$15 and $20.
With Google producing a more popular
operating system and charging nothing for
it, there was little incentive for a
phone maker to use Windows. The same
thing applied to tablets.
But in Microsoft's world, it made no
sense to give away its software. It's not
an advertising company like Google.
Google makes money when you use the
Internet; Microsoft makes money when you
pay for its software.
Now, with Windows free, Microsoft is
going to try to make money on services
and other software that comes with
Windows. It's a risk, but the alternative
is watching Android completely take over
the planet.
Just as people have been telling
Microsoft to give away its software,
they've been begging Microsoft to get
Office on the iPad. Analysts estimate it
could generate billions in revenue.
Even if it doesn't generate billions,
it's important for the future of
Microsoft. A whole generation of computer
users growing up on tablets could get
used to the idea of going without
Office.
Credit for these decisions should not
accrue solely to Nadella. Former CEO —
and media punching bag — Steve Ballmer
set much of this in motion before he
left.
But Nadella is a considerably different
leader at Microsoft. He's less bombastic.
He's a little boring, frankly. But that's
OK: not every executive needs to light up
the stage.
What Nadella has said during both his
presentations this week seemed more
realistic. Nadella says Microsoft is no
longer the dominant force, and that it
needs to act like a hungry startup.
With these changes, it's not just talk
from Nadella. Microsoft is acting like a
different company.