Microsoft CorporationMSFT

Morningstar Rating

Stock Research and Analysis

by Toan Tran

The disruptive change brought about by cloud computing will challenge Microsoft's core Windows and Office franchises, but it will also present the firm with an opportunity to capture a larger share of enterprise IT spending.

Cloud computing is a singular Read more

Bulls Say

The release of Windows 7 should entice many consumers and enterprises that skipped Windows Vista to finally upgrade from Windows XP.

Windows 7 will be the vanguard of another strong product release cycle with Windows Server R2 and Office 2010 following close behind.

With a warchest of cash and an AAA debt rating, Microsoft is one of the few firms with the technical and financial resources to invest heavily in cloud computing.

Windows Azure enjoys many inherited advantages such as Microsoft's existing base of third-party Windows developers.

The Bing search engine is Microsoft's most viable effort in Internet search thus far, and its partnership with Yahoo gives both companies their best chance to chip away at Google's dominance. Read more

Bears Say

Cloud computing is a disruptive force, and Microsoft may be handicapped from competing fully by the need to protect its legacy businesses.

The growth of netbooks and emerging markets will pressure the selling prices of Windows. Piracy is also a larger problem in emerging markets.

Although Microsoft has settled a majority of its antitrust issues, the firm will continue to operate under a regulatory microscope. Such regulatory oversight may make it difficult for Microsoft to raise prices or further its market share dominance. Read more

Strategy

Microsoft is working to remain a dominant software company in the coming cloud computing world. With Windows Azure, the company seeks to build a cloud platform that enjoys a robust third-party developer Read more

Management

Chairman Bill Gates and CEO Steve Ballmer are two of the brightest minds in technology. Ray Ozzie, Microsoft's chief technical officer, will also play an important role in shaping the firm's strategy. As evidenced by the firm's continuing record of Read more

Profile

Microsoft develops the Windows operating system and the Office suite of productivity software. Windows and Office account for roughly 56% of Microsoft's revenue, with another Read more

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