Trade Microsoft - MSFT CFD

Overview

Microsoft is an American technology corporation, established in 1975. It specialises in the production of many world famous hardware and software products. Microsoft’s flagship software products are Microsoft Office Suite and Windows OS. Their hardware includes the Xbox games consoles, the Windows phones, and Surface laptops. The company also produces online advertising and cloud services, such as: Bing, OneDrive, Xbox Live, Yammer. Microsoft conducts specialised training for developers and issues certificates, as well as providing full technical and marketing support for a number of their own products.

History

Microsoft was founded Bill Gates and Paul Allen on 4 April 1975, with Gates as CEO. Their first product was a BASIC interpreter for the MITS Altair 8800 microcomputer, which they developed using a simulator, as they did not have one of the actual computers at the time. After a flawless demonstration of the prototype, the product was marketed as Altair BASIC. In August 1977 the company formed an agreement with ASCII Magazine in Japan, resulting in the first international Microsoft office.

MIcrosoft produced their first operating system in 1980, their own version of Unix called Xenix, but what began their dominant streak was creation of MS-DOS. In November 1980 Microsoft was awarded a contract by IBM to produce a version of CP/M OS, to put onto IBM Personal Computer (IBM PC). Due to various factors such as software selection, MS-DOS became the dominant operating system on all PCs. Throughout the 1980’s and 1990’s Microsoft continued to develop operating systems, as well as starting Microsoft Office in 1990. In this period, Windows 95 was created which had predictive multitasking, as well a new user interface and 32-bit compatibility. Windows 95 also shipped with MSN, and a web browser (the iconic Internet Explorer was not ready at release), in line with Bill Gates’ now famous “Internet Tidal Wave” memo.

Leadership was turned over to Steve Balmer in 2000, while Gates stayed on as Chief Software Architect. During the 2000s “United States vs Microsoft”, a court case calling Microsoft “an abusive monopoly” came to its conclusion, resulting in significant payouts. Throughout this decade Microsoft continued its expansion of hardware, including the introduction of the Xbox. On 27 June 2008 Gates retired from his role, however still remained as an advisor on many projects within the company, including Azure Services.

Throughout 2011 and 2012 Microsoft undertook a significant rebranding and updating of its corporate image, having missed the smartphone boom of the mid 2000s. It introduced the new Surface line, 18 June 2012, sold half of its stake in MSNBC in July 2012, and released the Xbox One in 2013. Steve Balmer stepped down as CEO in 2014; when announced was met with stock price rise of 10%. The current CEO, Satya Nadella, has overseen a period of significant growth, with continued innovation, and a doubling in the share price during his tenure, as of April 2018.

Products

The business can be split into three main segments, as described by Microsoft: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.

Productivity and Business Processes includes the wide range of productivity, communication and information services, such as Office 365 subscriptions, Dynamics business solutions, and the recently acquired LinkedIn (purchased in 2016 for $26 billion). This part of Microsoft’s business also includes consumer brands such Outlook.com and Skype.

The Intelligent Cloud part of Microsoft’s service includes all of their server and cloud based services. This includes Microsoft SQL Server, Windows Server, and Azure. The main focus of this side of the business is on IT professionals and developers, in order to help them be more efficient and productive.

More Personal Computing includes the all computer operating systems (Windows OEM), various devices (Surface and PC accessories), and their range of gaming devices: the Xbox range, and the associated motion sensor, Kinect.

Trading history

Microsoft stock contributes to the NASDAQ-100, DJIA, S&P 500, and the S&P 100 indices. Microsoft went public on the NASDAQ on March 13, 1986, at a starting price of $21. The IPO was considered a success, with closing price on the same day being $35.50. Throughout its lifetime it is estimated that Microsoft shares have made four billionaires, and approximately 12,000 millionaires out of its employees. As of 16 April 2018 Microsoft’s shares trade at $91.83, creating a market capitalisation of $719.08 billion. The Microsoft stock price has been fairly steady, and recent fluctuations can be seen on the MSFT chart at Capital.com. Despite the consistent growth, there have been two significant corrections: the first during the dot.com bubble, and the second during the 2008 recession. Since early 2010 the price has moved steadily upwards.