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New Telco 2.0 Research: Microsoft’s Pivot to a Communications-Centric Business

Microsoft is a company besieged by disruptive forces. The Wintel model that served them so well is challenged by mobile-first and cloud-native technologies, the consumerisation of the enterprise, and direct competition from an Apple rejuvenated by its decision since the iPhone 3G to develop its own silicon and make a strength of its command of the supply chain.

Microsoft Comms Centric Fig 2 Annual Revenue and Gross Margin.png

Earlier this summer, they were forced to abandon their biggest strategic initiative yet - the strategic partnership with, and then acquisition of, Nokia’s smartphone business. This set them back $8.5bn. At the same time, over in the former Online Services division, their parallel effort to compete head-on with Google has racked up $12bn in accrued losses.

This looks like a story of failure, but Microsoft is also in the process of carrying out its own disruptive strategy shift. In the cloud, Azure has developed a strong reputation for quality, and is becoming an increasingly important driver of revenue, while Office 365 has become Microsoft’s strongest product. Microsoft has essentially re-focused its strategy, moving from one centred on Windows as a ubiquitous platform, to one centred on communications and collaboration through the Office 365 suite and Skype for Business. And even the Bing businesses are beginning to improve.


To find out more, click here to read our Microsoft: Pivoting to a Communications-Centric Business Executive Briefing.

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