Windows 10 was a massive undertaking for Microsoft and came at a time when the company was seemingly reeling from several public initiatives that were poorly received. Between the company's declining smartphone market share, the disaster that was the Windows 8 release and the fumble of the Xbox One announcement, Microsoft needed a win and Windows 10 was arguably it for the time being.
In a little less than four years, Microsoft has almost entirely pivoted its fortunes from being tied to Windows to now relying on a new platform prospect in Azure, or "The Microsoft Cloud." Sure, Windows licensing is still a large business for the company, but Microsoft is already seeing sunnier days ahead with Azure and investors are handsomely rewarding the prospects.
A new rating from Atlantic Equities investment firm has further solidified the notion that Microsoft is more a cloud company than it is software packing giant. Equities analyst James Cordwell told its clients that Microsoft's recent re-org was a clear indicator of the direction the company was going and how that would affect the businesses future financial pursuits.
“Azure has replaced Windows as the platform underpinning Microsoft's enterprise offering, and we forecast it exceeding $100 billion revenue over the next decade,” Cordwell wrote. “With Office 365, Microsoft has already established a strong position in the software as a service market and there remains robust growth potential as the greater accessibility of the cloud delivery model continues to drive expansion in the user base and customers steadily upgrade from basic packages.”
Cordwell is so bullish on Microsoft's future that he has set a 24 percent increase in price target for investors that brings the total to $125. Cordwell's confidence is backed by Microsoft's recent 3 percent jump in market share from 10 to 13 that results in a direct erosion in Amazon's leading market share.
Realistically speaking, many investors see the market unfolding similar to the maturing days of the smartphone and PC markets as they settled into a dual provider landscape with Amazon raking in $185 billion and Microsoft racking up $115 billion in revenue in roughly 10 years, for a combined 70 percent market share.