Where is Microsoft going next?

Dan Gorenstein Jan 31, 2014
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Where is Microsoft going next?

Dan Gorenstein Jan 31, 2014
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There’s a lot of chatter out there about who will be named as Microsoft’s next CEO. And there’s questions swirling about whether Bill Gates will step down as board chair. The company isn’t talking. 

But one thing seems clear: the tech giant wants to do more than be king of software.

Forrester analyst George Lawrie says the time has come for Microsoft to expand beyond its core software business. 

“In a way its traditional business is quite saturated. So from their perspective they’ve got to look for different sources of revenue,” he says. With nearly $80 billion in revenue last year, Microsoft is well positioned to pivot.

“Microsoft certainly needs to expand its horizons, but the question of in which direction,” says Roger Kay, president of runs Endpoint Technologies Associates. Kay says the company has had some hardware success, Xbox for example.

But there’s something a little cannibalistic about the move.

“Microsoft’s traditional customers, Dell, Hewlett-Packard, Acer, Lenovo are all in the hardware business. And so basically Microsoft starts competing with its own customers when it moves into hardware,” he says.

The smart money, says Kay, may be internet services, something like Amazon. Whoever becomes Microsoft’s CEO, Kay says the test is to pull the company’s different businesses together and thrive.

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