Goldman Sachs thinks Microsoft is making a comeback — here's why

Business Insider ^ | 12/18/2015 | Max Slater-Robins

[SeekAndFind]

Goldman Sachs has published a 22-page research note looking at Microsoft's business and its opportunities. The research, titled "Righting a Wrong," upgrades Microsoft stock from a Sell rating to Neutral.

The research note goes into detail, analysing all of Microsoft's core businesses, including Office, Windows, and Azure. It notes that, while the company is in a state of transition, there is light at the end of the tunnel.

The transition of users from offline Office, which customers acquired and kept for five to seven years, to Office 365, which has a yearly subscription, is bearing fruit.

Goldman highlights the work of CEO Satya Nadella and CFO Amy Hood as being instrumental in turning the company around.

"The company's ongoing transition to the cloud [has] been very well executed by new senior leadership, most notably Satya Nadella and Amy Hood," the note reads.

The research breaks down each of Microsoft's core businesses, giving an overview of the perceived upside:

Office: The transition from a single office license to a multiyear subscription saw a drop in revenue from the productivity software, but this, according to the note, is preferable now that users pay every year, rather than every five.

Goldman also sees potential areas of expansion for the Office suite, including mobile devices (such as the iPhone and the iPad), emerging markets, and messaging.

The research also praises the price hike for Office E5, the most recent version of the software that is aimed at businesses. According to Nadella, the company could see an increase of $50 billion (£33 billion) in revenue from the change in price.

Intelligent Cloud: The note looks at Microsoft's cloud products, such as Azure, and the value they can create for the company.

[SeekAndFind]

Amazon and Microsoft are engaged in a turf war over the online storage and services space in both Europe and the US. According to the Goldman note, investors see Microsoft stock as a way into that battle. (Azure currently trails Amazon Web Services, but the war is far from over.)

[Mr. K]

I don’t know about Windows 10 being all spyware and stuff but it sure runs sweet.

I just got a new laptop and was prepared to hate it.

Windows 7 (or was it 8?) made me want to get violent (when they changed the whole user interface and removed the start menu because “nobody uses it”)

But it runs nice and smooth and faster than any previous version

[Secret Agent Man]

Yeah who cares about the O/S spying on you and removing legit apps on its own, if it runs fast?

Do I have to add /s.....?

[dayglored]

Goldman Sachs thinks Microsoft is making a comeback ... PING!

You can find all the Windows Ping list threads with FR search: just search on keyword "windowspinglist".

[Stentor]

Goldman Sachs has published a 22-page research note looking at Microsoft's business and its opportunities. The research, titled "Righting a Wrong," upgrades Microsoft stock from a Sell rating to Neutral.

All Muppets should report to their nearest subway shelter to avoid being nuked. Goldman is taking the exact opposite position as this is being propagated.

[Oceander]

Guess I’ll be keeping my old systems, with their offline versions of Office, for a lot longer than I thought. Sort of like converting an old system into a typewriter I use only for word processing. As for email, there are plenty of other email clients out there.