Industrial Internet Transformation – Microsoft (II)

Microsoft staged a successful industrial Internet transformation

The fact that Microsoft can climb from the bottom of the valley is actually due to its successful separate of the C-terminal business and personal computers, and the transition to the enterprise-level service market. In today’s words, it is the transition from the consumer Internet to the industrial Internet, it is very good. This is also due to Microsoft’s organizational restructuring at the time. According to Microsoft’s organizational structure at the time, its business was divided into five pieces. They are like five small companies, each with its own sales, marketing and finance departments. Under such a structure, it is difficult to form a synergy inside, and the right to speak is in control of the Windows business that was still making money at that time. The strategic focus has also been around Windows.

In the past, Office was closed in its Windows system, just like today’s closed Apple ecosystem, and today’s Office is more open to support competitor platforms such as iPad, iPhone, and Android, which means Microsoft is moving to a new open model. Development has also expanded the broader source of profitability. Secondly, smart cloud computing is related to personal computers, and for a long time in the past, Microsoft’s main profit growth came from personal computers. Cloud computing was the world of Amazon at the time. After we watched it for a few more years, Microsoft’s 2017Q4 financial report showed that cloud service revenue increased by 89% year-on-year, which is the first engine of Microsoft’s revenue. And in 2017, Microsoft’s revenue from commercial cloud services reached $18.6 billion, surpassing Amazon’s $17.5 billion over the same period. Among them, Azure has become a star product in Microsoft cloud services, and has maintained a 90% quarterly growth rate. In the first quarter of FY18, Microsoft cloud service revenue reached 20 billion US dollars, surpassing 20% of total revenue for the first time. Among them, Azure cloud service revenue growth rate was 93%, surpassing Windows for the first time, and Microsoft broke its old path dependence.

In Fang Xingdong’s view, Microsoft’s successful transformation is another new legend in the high-tech field following the rescue of IBM by Gerstner in the mid-1990s. But in fact, Microsoft’s transformation is more like an inspirational story of a aging giant’s successful transformation into the industrial Internet. The domestic Internet giants generally have B-end anxiety, and the industrial Internet transformation is easy to say, but who can change faster, who can stand in a better position. Currently, from Google to Amazon to Apple, they are more often plagued by unusual market conditions, but their respective strengths and business foundations are very strong. Although Microsoft is relatively more stable, everyone in the future all has the no.1 possibility. However, for Microsoft, it is not important whether the market value is the first. What is important is that it has found a new direction and rhythm. It is more important than anything else to have a long-term hope and gradually get rid of growth anxiety.

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