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MSFT Down As Markets Fall
China is the news story of the day, BHP’s warning about mediocre Chinese demand is pressuring the markets. Shares of MSFT are off with the rest of technology. Upcoming catalysts include Windows 8, Windows Server 8, Office 15 and Windows Phone 8; expansion in the smartphone market with primary hardware partner Nokia; strides in cloud computing; profitability in the online business, including integration of Skype; and continued evolution of Kinect and next generation Xbox. The stock currently trades at 8.7x Enterprise Value / TTM Free Cash Flow.Windows 8 Tablets Will Be Available Before The Holidays (Bloomberg)
Microsoft will finish work on Windows 8 this summer, setting the stage for personal computers and tablets with the operating system to go on sale around October, in time for the holidays. The fall time frame matches what Matt Rosoff at Business Insider has heard from numerous sources close to the company. These iPad competitors will have a tough fight: Apple just sold 3 million iPads in a single weekend. If they don’t launch ahead of the holidays, Microsoft is in trouble.
Amazon Lowering Costs On Cloud Computing To Take On Microsoft (BusinessWeek)
Amazon, once again dropping prices on its Internet-based cloud-computing service EC2, said it will keep cutting when it can, putting pressure on competitors like Microsoft to keep prices low. Microsoft and Amazon are jousting to stay competitive on price for a reason: The market for so-called public cloud services will increase from $21.5 billion in 2010 to $72.9 billion in 2015, according to IDC. Google already cut pricing on cloud storage in response to Amazon’s cuts.
Don’t Expect A New Xbox Until 2013 (Bloomberg)
Microsoft will release the next version of its Xbox console in 2013 at the earliest, as the company squeezes at least one more year of sales out of its current model, according to sources. The company won’t be discussing new Xbox hardware at this year’s E3 either, quelling speculation that the device would be unveiled at the 2012 show. Microsoft’s Xbox 360, bolstered by the Kinect motion-sensor accessory, had its best year of sales in 2011, giving the company incentive to keep it on store shelves for a longer period.
ERP Finally Coming To Azure Cloud Services (PCWorld)
Microsoft is planning to roll out its first “cloud-enabled” Dynamics ERP (enterprise resource planning) applications by the end of this year. Intentions for this were discussed last year and it looks like it’s finally coming to market. All Dynamics ERP products will continue to be available in on-premises form and through traditional hosting partners after the Azure launch. Microsoft expects there will still be a strong market for both scenarios.
“The Internet Has Become Like Electricity Or Water” (Boston Consulting Group)
The Internet economy of the G-20 nations will reach $4.2 trillion by 2016 almost 1.7x last year’s estimated level ($2.5 trillion), according to Boston Consulting Group (BCG). The study also shows the importance of the Web to consumers and to businesses trying to reach them. More than two-thirds of Americans would forgo coffee and 21% give up sex for a year to stay online. “The Internet has become like electricity or water,” said Dominic Field a partner at BCG. By 2016, the number of global Web users will reach 3 billion from an estimated 1.9 billion in 2010.
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