Microsoft is one of the biggest companies in the world and its founder, Bill Gates, is one of the world’s wealthiest men. But, who are the biggest Microsoft competitors out there and how do they stack up against this computing giant? Read on to learn more.
A Little About Microsoft
Microsoft is most known for its Microsoft Windows operating system and suite of office applications including Word, Outlook, PowerPoint, and Excel.
The company began in Redmond, Washington in 1975 and was co-founded by Paul Allen. It currently has over 180,000 employees.
It is most known for its Microsoft Windows operating system and suite of office applications including Word, Outlook, PowerPoint, and Excel.
The company produces hardware such as mobile phones, PCs, the Xbox gaming console, server hardware, and other smart devices. It also provides intelligent cloud storage services, cloud computing services, and business solutions.
Microsoft became the third company to ever have a trillion-dollar market cap, alongside its rivals Amazon and Apple. It reached two trillion in mid-2021.
Microsoft is a publicly-traded company listed on Nasdaq under its stock market symbol MSFT. In 2020 the company reported revenue of $143 billion and an operating income of $53 billion.
One of the company’s more recent cloud services is Microsoft Azure, which provides cloud computing, enterprise solutions, and business processes.
Microsoft’s Advantage and SWOT Analysis
Personal computing is the main source of income for Microsoft with $45.7 billion in revenue for 2019. This branch of the business covers things like products and services for consumers and other businesses.
Microsoft’s operating system, Windows, is the most popular worldwide by a very significant margin. It holds an 88% share of the market with Apple in second place with around 9% for its macOS systems.
Also accounted in the revenues for this division is hardware like the Xbox and Surface devices and revenue from the Bing search engine.
Microsoft Azure is one of the fastest-growing parts of Microsoft’s core business that competes with other enterprise solutions. It competes against companies like Oracle and Amazon Web Services and is currently the 3rd largest operator in this space.
The Intelligence Cloud business brings in $39 billion in revenue for the company. Its productivity suite of software makes up around $41.1 billion in revenue. This includes its Office software which it sells to schools, businesses, and individuals.
Microsoft’s hardware tends to be high-quality and competitively priced. Particularly when compared with Apple, which is more costly.
Strengths
Microsoft has incredible brand recognition. Microsoft is the most well-known of all operating systems available to consumers.
Microsoft’s office suite of tools and Microsoft’s Xbox console are tied tightly to its cloud computing solutions, which creates a circular reliance for users.
Microsoft has a diverse range of product offerings that can all be integrated seamlessly. This creates a Microsoft ecosystem that keeps users invested in Microsoft and its products.
Microsoft Windows is the most common operating system installed on personal computers. Windows dominates as a global leader in the computer industry, and users are accustomed to the pre-installed application software and user interface.
Weaknesses
The company has a heavy reliance on the Personal Computer and consumer electronics market. Strengthening its business processes segment can add diversity and increase annual revenue.
Laws and regulations against monopolistic services and features have been a weakness for the company since it has emerged as a tech giant in the industry.
Microsoft has had several failed acquisitions that hurt profits and net income. The company needs to choose acquisition targets more wisely to improve its success ratio.
Opportunities
Cloud computing services are one of Microsoft’s strongest offerings in recent years. Azure and other cloud services increasing in earnings by over 30% last year, and this sector of the company has impressive room to grow.
Microsoft has opportunities with integrating new technology into its products and services. Adding artificial Intelligence functionality to hardware and software solutions can ensure the company remains at the forefront of technology.
Smartphone and Tablet hardware, gaming consoles, and computer accessories are hardware areas where the company can improve offerings and expand selections to meet consumer demand.
Threats
Microsoft is frequently targeted by piracy and hacking campaigns. These threats can reduce total revenue and create a negative customer experience that tarnishes the company’s brand and reputation.
Competition is fierce. Other major tech companies are competing for market share in hardware, software, and cloud-based offerings
Changing consumer preferences may reduce demand for PCs. This has already begun with the shift from desktop computers to laptops and tablets.
Many consumers solely use smartphones in place of a computer. If Microsoft intends to keep consumer market share, it must begin offering valid alternatives to Apple devices and Google tablets.
Microsoft Biggest Competitors
Microsoft is a highly innovative company that spends a lot of money on research and development. This means that they can introduce new products to the market and keep capturing new business.
But it has stiff competition:
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Apple – A technology company the specializes in hardware like computers and phones.
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Amazon – An eCommerce store with its cloud computing division AWS.
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Google – An American tech company that competes with Microsoft in multiple industries.
Apple
Apple is a technology company that was founded by Steve Jobs, Ronald Wayne, and Steve Wozniak in 1977.
The trio introduced the Macintosh computer to the market. It was known to be superior but was more expensive than Windows PCs.
The brand has innovated and introduced new products since, including the iPod, iPhone, iPad, AirPods, and much more.
Apple has become one of the most successful companies in the world and was the first company to have a trillion-dollar market cap.
There are almost 150,000 people working for Apple around the world, and its headquarters are in Cupertino, California.
The company reported total revenues of $274.515 billion in 2020 with an operating income of $66.288 billion.
Apple has released its own suite of office tools to compete with Microsoft Office.
The company has impressive brand loyalty and has introduced lots of new products intended to keep customers within Apple’s ecosystem.
Amazon
Amazon began as a book retailer in 1994 when it was founded by Jeff Bezos. It has quickly managed to become the most successful eCommerce store in the world.
The company has expanded into multiple different markets and has many business interests that overlap with Microsoft.
Perhaps the most significant of them all is the cloud computing industry. Amazon’s AWS is the industry leader with a market share of 32% but is followed closely by Microsoft Azure.
The company is listed on Nasdaq under the ticker symbol AMZN. In 2021 Amazon reported revenues of $469.8 billion with $24.88 billion in operating income.
Google is a technology company that was founded in 1996 by Larry Page and Sergey Brin. The pair were students at Stanford University.
Google started as a search engine called BackRub. It was rebranded as Google a year later and has gone on to be the number one most visited website in the world.
Google’s search engine has enabled the company to become a prominent figure in the online space. Its search engine has a market share of 92.5% eclipsing Microsoft search engine Bing which has a 2.44% share.
Google also has its own cloud computing business that competes with Azure and AWS, but is significantly smaller in size.
The company has its own suite of completely free software like Google Docs, Google Drive, and Gmail.
Google is owned by its parent company Alphabet Inc. which is listed on Nasdaq under the ticker symbols GOOGL (Class A) and GOOG (Class C).
Microsoft’s Biggest Competitors: Final Thoughts
Microsoft and its rivals have a diverse range of interests. Although there are many areas where this overlaps they all have separate interests too.
The most hotly contested industry for these companies is cloud computing and enterprise solutions. Google, Amazon, and Microsoft are each investing heavily in these divisions.
As more businesses go digital, this industry will continue to grow and Microsoft has the name recognition and reputation for quality to keep acquiring new customers
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