What made Microsoft the most money? (2024)

What made Microsoft the most money?

Microsoft Business Model

Microsoft sells computing devices, cloud systems and services, software, and other products to consumers and businesses. The company's intelligent cloud segment is the largest source of profit, as well as the fastest-growing.

This leads to some very key factors that point to Microsoft's continued success. These include innovation, strong leadership, a vision, trust in every employee, and resiliency.

Core businesses

Historically, Microsoft has generated the majority of its revenue from the commercial licensing of its software and various operating systems. One of the company's largest segments is 'intelligent cloud'.

The revenue beat was driven by strong demand in the personal computing segment, intelligent cloud segment and productivity and business processes segment, which beat Street estimates by 7%, 3% and 2% respectively. Just as impressive, during the quarter, Azure revenue grew almost 30% year over year.

Microsoft (NASDAQ: MSFT) recently overtook Apple (NASDAQ: AAPL) as the world's most valuable company. As of this writing, Microsoft's market cap has reached $2.89 trillion and remains higher than Apple's market cap of $2.87 trillion.

Microsoft Becomes Second Company Ever To Top $3 Trillion Valuation—How The Tech Titan Rode AI To Record Heights.

Microsoft's best-known software products are the Windows line of operating systems, the Microsoft 365 suite of productivity applications, and the Edge web browser.

The network effect, economies of scale, and strong branding all work in Microsoft's favor, but it operates in highly competitive markets that are changing at accelerating rates. Morningstar assigns Microsoft a wide economic moat based on the competitive success of Office and cloud products.

A handful of times since 2018, Microsoft has briefly taken the lead over Apple as the most valuable company, most recently in 2021, when concerns about supply-chain shortages related to the pandemic hit the iPhone maker's stock price.

Who is Microsoft's biggest competitor?

Microsoft Corporation is an American multinational technology company that has been a key player in the computer industry since its founding in 1975. Headquartered in Redmond, Washington, Microsoft initially gained dominance in the operating systems market during the 1980s and 1990s with MS-DOS and Windows.

Microsoft, Apple, and Saudi Aramco are the biggest companies measured by market cap.

Gates did not start Microsoft with a loan from his parents, it was entirely bootstrapped financially. Paul Allen and Gates had saved up a small amount of money from contract work. Together they provided all of Microsoft's seed capital.

How Did Bill Gates Start Microsoft? Bill Gates basically started Microsoft by telling a small lie. He and Paul Allen told the company MITS that they had built an interpreter that would let the Altair 8800 micro-computer execute commands written in a version of BASIC.

Today, he holds a 1.38% stake in Microsoft, amounting to 103 million shares. This significant reduction from his initial post-IPO stake indicates a strategic shift in his investment philosophy. Over time, Gates has diversified his portfolio, moving away from a Microsoft-centric wealth concentration.

But as of this writing, Microsoft is worth $3 trillion, and Alphabet only $1.9 trillion. Microsoft became a growth stock again after Satya Nadella, who took over in 2014 as its third CEO, prioritized the expansion of its cloud, mobile, and artificial intelligence (AI) ecosystems.

Institutional investors are the majority owners of Microsoft, accounting for almost 70% of outstanding shares. Former CEO Steve Ballmer owns a 4% stake in Microsoft, more than its founder Bill Gates, who holds a 1.3% stake. Vanguard and Blackrock are the two largest Microsoft's institutional investors.

Are there any Trillionaires?

As of today, no billionaire is within striking distance of becoming a trillionaire. Elon Musk is, at present, the world's richest person, with a net worth of $206 billion, while Jeff Bezos is in the number two position with $179 billion, according to Bloomberg.

The top shareholders of Microsoft are Satya Nadella, Bradford L. Smith, Jean-Philippe Courtois, Vanguard Group Inc., BlackRock Inc. (BLK), and State Street Corp.

Technically, Bill Gates didn't invent anything genuinely new. Instead, he and Paul Allen created two high-quality products that computer companies could use: the BASIC programming language for the Altair 8800 and the MS-DOS operating system for the IBM PC.

The last Microsoft project that Bill Gates personally contributed a significant amount of code to was the BASIC interpreter built into the TRS-80 Model 100 computer, released in 1983. By that point, Bill was more focused on managing the company, and less and less on writing code.