Yesterday, 11:18 AM
- During yesterday afternoon's FQ4 earnings call (transcript), HP Enterprise (HPE +3.1%) CEO Meg Whitman disclosed Microsoft Azure (MSFT -0.5%) "will become a preferred public cloud partner" for HPE, through a partnership that will be detailed next week. In return, HPE will "serve as a preferred provider of Microsoft infrastructure and services for its hybrid cloud offerings."
- The deal comes a month after HP announced it's shutting down its public cloud services ops, rather than compete head-on with well-established players such as Amazon (the market leader), Microsoft (#2), IBM, and Google. The company, whose on-premise IT service ops have been pressured by cloud adoption - enterprise services division revenue fell 9% Y/Y in FQ4 to $5B - added it's still committed to offering private and managed cloud services.
- For Microsoft, the deal gives Azure the backing of HP's still-massive enterprise sales and IT services workforces. It follows a multifaceted Azure partnership with server OS rival Red Hat. Microsoft reported Azure revenue rose over 100% Y/Y in calendar Q3, but didn't give a figure.
- HPE continues trading higher after beating depressed FQ4 sales estimates with the help of positive x86 server and networking hardware growth, and reiterating its FY16 EPS guidance (while guiding FQ1 below consensus). Analyst reactions have been mixed - bulls are trumpeting a low valuation and the potential for improved execution following HP's breakup, while bears argue sales and cash flow pressures remain substantial.
Fri, Nov. 20, 3:41 AM
- Volvo (OTCPK:GELYY) has struck a deal with Microsoft (NASDAQ:MSFT) that will see the two companies work together in developing driverless vehicles and give potential car buyers an interactive shopping experience using the latter's HoloLens headset.
- Customers who come into a Volvo showroom will be able to use HoloLens to view a car in 3D, change colors and see how many of its features work.
- Although details were scarce in other areas, the move highlights the trend for technology companies to jump into the autos space.
Tue, Nov. 17, 4:43 PM
- Wanting to get a larger portion of corporate IT security budgets that have seen healthy growth as companies react to a slew of major hacking incidents, Microsoft (NASDAQ:MSFT) has launched an Enterprise Cybersecurity Group (ECG) promised to deliver "security solutions, expertise and services that empower organizations to modernize their IT platforms, securely move to the cloud, and keep data safe."
- Much like many other enterprise IT firms, Microsoft is looking to pair security software with human and cloud-based services (security appliance vendors also bundle hardware). ECG's offerings include security assessment, monitoring, threat-detection, and incident-response services. Meanwhile, a new Cyber Defense Operations Center will feature dedicated teams 24x7 to respond to security incidents, and is said to provide "direct access" to thousands of professionals within Microsoft for dealing with security threats.
- The software giant has also announced it's testing Azure Security Center, a Web-based console that works with third-party hardware and software to give IT admins an overview of their company's Azure security profile, and uses analytics to detect and respond to threats. Satya Nadella states such features could also be used for on-premise security, and to protect services running on third-party clouds.
- Microsoft exec Bret Arsenault: "Microsoft’s unique insights into the threat landscape, informed by trillions of signals from billions of sources, create an intelligent security graph that we use to inform how we protect all endpoints, better detect attacks and accelerate our response." In a blog post, he highlights the security tools provided via Windows 10, Office 365, Azure, and the Enterprise Mobility Suite (EMS), and claims Microsoft spends over $1B/year on security R&D.
- In other Microsoft news, Bob Stutz, the exec in charge of the company's Dynamics CRM app business, is leaving the company. Re/code reports Stutz is joining Salesforce. Dynamics CRM R&D lead Jujhar Singh will replace Stutz.
Thu, Nov. 12, 6:15 PM
- ValueAct's sale, declared to be carried out for "portfolio management purposes," lowers its stake in Microsoft (NASDAQ:MSFT) to 56.6M shares, or 0.7%. (Form 4 filing)
- Is this simply a case of profit-taking? ValueAct took a $2B stake in Microsoft in April 2013, a few months before Steve Ballmer announced his retirement plans. Shares have risen 92% since.
- ValueAct chief Mason Morfit won a board seat in 2014. Around that time, Bloomberg reported ValueAct is pushing Microsoft to focus on its enterprise and cloud offerings, and to de-emphasize consumer/hardware products. Though still quite committed to several hardware lines, Microsoft did announce major job cuts and a narrower focus for its phone unit four months ago.
- MSFT -0.6% after hours to $52.98.
Wed, Nov. 11, 7:30 PM
- Walt Disney (DIS -0.8%) launched Disney Infinity 3.0 for the Apple TV today, and unlike many games for the box, it comes with a chunky controller usually seen with higher-end gaming consoles.
- That could prove a critical test of whether the platform could support more intense gaming, and present real competition to the top two consoles made by Sony (NYSE:SNE) or Microsoft (NASDAQ:MSFT).
- Most all games on Apple TV are controlled by the device's slender remote. But the Nimbus controller made by SteelSeries (specifically for Apple's device) features analog sticks and D-pads familiar to console gamers, and sells for $50 (but at a $15 discount in the Infinity 3.0 bundle).
- Disney's entry in the toys-to-life category has underperformed compared to Activision Blizzard's Skylanders -- also now on Apple TV -- but the combination of content brands that Disney can leverage for the free-form game, including Marvel and Star Wars, has kept hopes high for the platform.
- Previously: Disney Infinity 3.0 launches with 'Star Wars' characters (Aug. 31 2015)
Mon, Nov. 9, 1:42 PM
- Secure Islands' software automatically classifies, sets access policies for, and (if needed) encrypts unstructured data (documents, e-mails, photos, etc.) when it's created or otherwise first enters a company's IT infrastructure. It also provides an auditing/reporting tool for providing an overview of a company's data usage.
- Microsoft (MSFT -1.8%) is buying Secure Islands for an undisclosed sum. ZDNet reports the purchase price is ~$77.5M; Globes reports it's between $100M-$150M.
- Microsoft: "This acquisition accelerates our ability to help customers secure their business data no matter where it is stored – across on-premises systems, Microsoft cloud services like Azure and Office 365, third-party services, and any Windows, iOS or Android device." Secure Islands' technology will be integrated with Microsoft's cloud-based Azure Rights Management service, which (for $2/user/month) protects e-mails, Office docs, and other content from unauthorized access.
- Secure Islands is Microsoft's third acquisition of an Israeli security tech firm in the last year. The others are cybersecurity/identity-protection software vendor Aorato, and cloud/SaaS app security software vendor Adallom. The company has also recently bought two other Israeli companies: Text-analysis/e-discovery software firm Equivio, and Surface stylus chip developer N-trig.
- Secure Islands already has a partnership with Adallom. Varonis (VRNS -1.4%), a leader in the unstructured data management/governance software space, is a rival, as are EMC and Dell.
Wed, Nov. 4, 10:24 AM
- Going forward, Red Hat Enterprise Linux (RHEL) will be "the preferred choice for enterprise Linux workloads" on the Microsoft Azure cloud platform. In addition, Microsoft (MSFT +0.7%) and Red Hat (RHT +1.1%) are "working together to address common enterprise, ISV and developer needs for building, deploying and managing applications on Red Hat software across private and public clouds."
- Other aspects of the deal: 1) Azure will also support Red Hat's JBoss middleware and Web server software, Gluster scale-out storage software, and OpenShift cloud app development platform (PaaS). 2) The companies will offer joint support to enterprises using Azure and Red Hat's software, including for hybrid clouds. 3) Users of Red Hat's CloudForms cloud management software will be able to manage RHEL instances running on both Azure and Microsoft's Hyper-V virtualization platform. 4) Developers will have access to Microsoft's .NET framework across Red Hat's offerings.
- Microsoft already supported Linux on Azure - support for a Linux variant known as CoreOS was announced last year - but until now hadn't reached a deal with the world's biggest enterprise Linux vendor. RHEL and other Linux variants, of course, compete with Windows Server in the server OS market.
- Azure is widely believed to the world's second-largest public cloud platform, behind Amazon Web Services. Microsoft stated in its calendar Q3 report Azure revenue was up over 100% Y/Y, but didn't give a figure.
- Update: Some other Microsoft news: Halo 5: Guardians has produced first-week sales of more than $400M. The sales bring lifetime revenue for the Halo franchise above $5B.
Tue, Nov. 3, 4:17 AM
- Despite many firms expanding their cloud storage options, Microsoft (NASDAQ:MSFT) is shrinking its offerings, the company wrote in a blog post late Monday.
- Citing user abuse, Microsoft said it would end unlimited OneDrive storage plans and make the following changes starting in early 2016:
- Current unlimited users will be capped at 1TB; It also plans to eliminate 100GB and 200GB plans, and offer a reduced 50GB plan for $1.99 per month instead; Its free offering will be cut from 15GB down to 5GB for all users, current and new.
Thu, Oct. 29, 5:28 PM
- Google (NASDAQ:GOOG) engineers have been working for about two years to fuse Android and Chrome OS, the WSJ reports. The Web giant plans to preview a unified operating system in 2016, and launch it in 2017.
- A unified OS appears to mesh with new Google CEO Sundar Pichai's worldview. Pichai, who once directly oversaw Android and Chrome OS, predicted on Google's Q3 call "mobile as a computing paradigm is eventually going to blend with what we think of as desktop today."
- It would also be similar to Microsoft's (NASDAQ:MSFT) OS strategy: Windows 10 serves as a common OS for PCs and mobile devices, with the platform's Continuum technology enabling universal apps whose UIs change based on whether keyboard/mouse or touch input is being used. Apple, by contrast, continues to reiterate it has no plans to merge iOS and Mac OS; Tim Cook famously referred to such integration as being akin to combining a refrigerator and a toaster.
- Possibly contributing to Google's decision: Android is far more popular than Chrome OS, claiming 1.4B active users as of September and an 82.8% Q2 smartphone unit share (per IDC), not to mention a giant developer base. By contrast, IDC estimates Chrome OS has less than 3% of the global PC market (the education market is a strong point). Thus, officially expanding Android's focus to the PC market through an OS supporting universal apps and Google Play could provide a shot in the arm for Google's PC ambitions.
- Update: Re/code follows up on the WSJ's report by reporting Google will start working with OEMs in 2016 to develop PCs running on Android, and that OEMs will still be able to build Chrome OS PCs if they want to.
Fri, Oct. 23, 9:16 AM
- While Microsoft (NASDAQ:MSFT) guided to FQ2 revenue of $24.8B-$25.4B vs. Street estimates of $24.8B, the revenue mix has gross margin guidance nearly 200 basis points less than consensus, says analyst Heather Bellini. By her team's count, it means an implied FQ2 EPS range of $0.68-$0.71 vs. the $0.72 consensus.
- For the full-year, Bellini cuts her revenue forecast in higher margin businesses (PBP and IC), though hiking estimates in lower margin units like Xbox and Surface.
- She reiterates a Sell rating, while lifting the price target to $45 from $40.
- Previously: Sell-side a buyer after Microsoft reports (Oct. 23)
- Shares +9.5% to $52.61
Fri, Oct. 23, 9:14 AM
Fri, Oct. 23, 9:07 AM
- Taking note of the earnings beat and inline FQ2 guidance, Credit Suisse analyst Philip Winslow says management's cutting of FY2016 operating expenses guidance to $31.9B-$32.1B (from $32.1B-$32.4B) could prove conservative.
- He boosts his FY16 EPS outlook to $2.88 from $2.72, and his price target to $60 from $55. The stock remains Outperform-rated.
- Also lifting the price target to $60 from $55 is Deutsche Bank, while FBR raises to $60 from $53.
- There's also an upgrade in the mix as BAML lifts MSFT to a Buy from Neutral. The price target is $63.
- Shares +10% to $52.83 in the premarket.
- Previously: Microsoft issues solid FQ2 guidance; shares +8% (Oct. 22)
- Previously: Microsoft beats by $0.08, beats on revenue (Oct. 22)
Thu, Oct. 22, 7:38 PM
- After several quarters of providing light guidance, Microsoft (NASDAQ:MSFT) is singing a different tune today: The software giant has guided on its call for its three reporting segments to collectively post FQ2 revenue of $24.8B-$25.4B, in-line with a $25.1B consensus and likely sparking hopes of upside given Microsoft's history of guiding conservatively.
- Productivity & Business Processes is expected to see revenue of $6.6B-$6.7B, Intelligent Cloud $6.2B-$6.3B, and More Personal Computing $12B-$12.4B. Forex is expected to have a 4% impact on revenue growth, after having a 5% impact in FQ1.
- Though revenue fell 7% Y/Y in FQ1 due to PC weakness and cloud transition (pushes out revenue recognition), cloud subscription billings helped the unearned revenue balance (non-GAAP) rise 3% Y/Y (9% exc. forex) to $23.1B. The contracted but not billed balance was above $23.5B.
- Also: Bing, once a large cash sinkhole, is finally profitable. Search-related revenue topped $1B in FQ1, with search ad revenue (ex-TAC) rising 23% Y/Y. Windows 10/Cortana integration appears to be helping: Nearly 20% of the quarter's search revenue came from Windows 10 devices.
- Other details: 1) Office commercial product/services revenue fell 2% Y/Y thanks to the 365 transition. Office consumer revenue fell 13%. 2) Xbox Live monthly active users rose 28% to 39M. 3) Enterprise mobility management (EMM) software customers more than doubled Y/Y to over 20K. 4) Windows volume license revenue fell 3% Y/Y, and Surface revenue fell 26% to $672M ahead of the Surface Pro 4 launch.
- Microsoft is trading at $51.89 after hours.
- FQ1 results, details, earnings slides (.ppt), guidance (.ppt)
Thu, Oct. 22, 4:48 PM
- Microsoft's (NASDAQ:MSFT) Intelligent Cloud reporting segment (one of the three main segments in Microsoft's new reporting structure, covers server products, Azure, and enterprise services) was easily the company's best-performing segment in FQ1, with revenue rising 8% Y/Y (14% exc. forex) to $5.9B. Segment op. income rose 14% to $2.4B. Azure revenue more than doubled Y/Y.
- Productivity & Business Processes (Office/Office 365 and Dynamics apps) revenue fell 3% Y/Y (+4% exc. forex), with sales pressured by the shift from up-front licenses to cloud subscriptions. Op. income fell 7% Y/Y to $3.1B. Office 365 consumer subs grew by ~3M Q/Q to 18.2M; Dynamics revenue grew 12% in constant currency.
- More Personal Computing (Windows, search, games, hardware) revenue fell 17% Y/Y (13% exc. forex) to $9.4B due to PC weakness and declining phone sales (-54% in constant currency). Op. income fell 4% to $1.6B. With the Windows 10 launch providing a boost, Windows OEM revenue fell 6% Y/Y, an improvement from FQ4's 22%.
- Financials: Lifting EPS: GAAP operating expenses fell 7% Y/Y to $7.3B (job cuts at work) after backing out year-ago one-time charges. Also helping: $4B was spent on buybacks. Gross margin rose 30 bps Y/Y to 64.6%. Microsoft ended FQ1 with $99.4B in cash/short-term investments (much of it offshore), and $37.5B in debt.
- Shares have risen to $51.66 after hours, making new 52-week highs along the way.
- FQ1 results, PR
Thu, Oct. 22, 4:11 PM
Wed, Oct. 21, 5:35 PM
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