Amazon <> Microsoft... They're cross-lake tech rivals in Seattle. Amazon set sales records earlier with Prime Day — Now it's Bill Gates' baby's turn: Microsoft profits spiked 49% to a record high last quarter. And it remains the world's only $1T (trillion with a "T") publicly-traded company as the stock rose 3% after the report.
It's thanks to the "profit triangle"... You probably notice Microsoft products at work. But it's so much more than that. Here's how its $33.7B of revenue last quarter was almost perfectly divided 33/33/33:
- 👔 Productivity & business processing: This includes Office (Word, Excel, PowerPoint), messaging (Outlook and Teams), and LinkedIn (acquired in 2016).
- ☁️ Intelligent Cloud: Companies that have apps or websites (that's most of 'em) need processing power. These days they rent it via servers from tech companies like Microsoft, Amazon, or Google.
- 🎮 Personal computing: Regular folk don't rent processing power as much as companies do. We buy computers, tablets, and an Xbox or two.
Microsoft owned chapter 1 and chapter 3 of computers... but completely missed chapter 2.
- Personal Computers. Paul Allen and Bill Gates founded Microsoft and quickly dominated computers (with Windows) and TPS reports (with Word/Excel/PowerPoint).
- Mobile. Bill Gates confessed his biggest business mistake: letting Google become the default operating system for smartphones with Android.
- Cloud. Under new CEO Satya Nadella, Microsoft is #1 again thanks to growth in cloud services and subscription products, like Office 365.
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