Fri, Mar. 13, 1:04 PM
- Microsoft (MSFT -0.1%) has "generated $1 billion in total worldwide revenue from Azure since 2011," BI's Julie Bort reports after talking with sources. Bloomberg reported in 2013 Microsoft had produced $1B in Azure-related revenue; however, that figure also included software purchases tied to deployments of the cloud infrastructure/app development (IaaS/PaaS) platform.
- Bort adds over 3K companies have added Azure to their existing enterprise contracts, and that many of them "are not using Azure at all, or have dabbled with it and then ignored it." Salespeople have reportedly been pressured to boost Azure sales, and have "sold Azure by discounting other software and adding the money saved on that software back into the contract as credits to try Azure."
- Microsoft hasn't broken out Azure revenue by itself; it's only reported as part of a Commercial Cloud segment that also includes commercial Office 365 and cloud Dynamics app sales.
- BI's figure suggests Amazon Web Services (NASDAQ:AMZN) still has a sizable revenue lead over Azure. Amazon's "Other" revenue, which is dominated by AWS, totaled $5.6B in 2014 (+42% Y/Y). Synergy Research estimates Amazon had a 30% Q4 IaaS/PaaS revenue share on the back of 51% Y/Y growth, and Microsoft a 10% share (#2 overall) with 96% growth.
- GeekWire reports (citing a memo from Satya Nadella) Microsoft is moving its MSN online services group from its apps/services division (run by Qi Lu) to its OS division (run by Terry Myerson). The shakeup could yield efforts to more tightly integrate MSN's services with Windows.
- Reuters reports Microsoft is prepping a more advanced version of Cortana called Einstein that will ship with Windows 10, and also be available via standalone iOS and Android apps. Like Google Now, the new version of Cortana will read/analyze e-mail to push location and time-sensitive info to users.
Fri, Mar. 13, 3:21 AM
- In the latest sign of weakening demand for personal computers, International Data Corp. predicts global shipments of PCs will decline 4.9% this year to 293.1M units, a bigger drop than its previous guidance for a 3.3% decrease.
- According to market research firm, the PC market declined 0.8% to $201B last year and is expected to drop an additional 6.9% in 2015, with smaller declines in coming years, reducing the market to $175B by 2019.
- Previously: Intel -4.1% on Q1 warning; other PC industry names also fall (Mar. 12 2015)
- Related stocks: OTC:ASIYF, AMD, HPQ, INTC, OTCPK:LNVGY, MSFT, MU, NVDA, SNE, STX, OTCPK:TOSYY, WDC
Thu, Mar. 12, 9:17 AM
- Intel (NASDAQ:INTC) now expects Q1 revenue of $12.5B-$13.1B, below prior guidance of $13.2B-$14.2B and a $13.7B consensus. Gross margin guidance remains at 60% (+/- 2%), with lower volumes offset by higher ASPs.
- "All other expectations" have been withdrawn - that presumably includes full-year guidance for mid-single digit revenue growth. Guidance will be updated during Intel's April 14 Q1 report.
- The chip giant blames the warning on "weaker than expected demand for business desktop PCs and lower than expected inventory levels across the PC supply chain." In particular, it thinks "lower than expected Windows XP* refresh in small and medium business and increasingly challenging macroeconomic and currency conditions, particularly in Europe," are taking a toll on sales. Server CPU division sales are "meeting expectations."
- Other PC-exposed names are following Intel lower: Microsoft (NASDAQ:MSFT) -2.4% premarket, AMD -2.8%, Nvidia (NASDAQ:NVDA) -2.5%, HP (NYSE:HPQ) -2.3%, Seagate (NASDAQ:STX) -2.5%, Western Digital (NASDAQ:WDC) -2.7%, Micron (NASDAQ:MU) -3.6%.
- Update (11:35AM ET): While Intel is still down over 4%, Micron and Seagate have turned positive, and HP is close to breakeven. Microsoft, Nvidia, and Western Digital have pared their losses, but remain lower.
Wed, Mar. 11, 7:18 AM
Fri, Mar. 6, 6:48 AM
- While HBO (NYSE:TWX) is in high-profile talks with Apple to launch its streaming HBO Now service on Apple TV, other providers will be joining in at some point or even at launch day yet, including Google and TiVo (NASDAQ:TIVO) among others.
- Apple (NASDAQ:AAPL) may be first to agree to the launch, Bloomberg notes, because its negotiation is simpler than that with HBO's longtime pay TV partners.
- Cox Communications and Cablevision (NYSE:CVC) are also linked to discussions, though traditional cable/satellite providers are a tougher sell, accustomed as they are to the traditional arrangement (and income stream).
- It's safe to assume all the partners marketing HBO's current HBO Go offering are likely to engage in some level of talks with TWX to offer HBO Now -- including Roku, Microsoft's (NASDAQ:MSFT) Xbox, Sony's (NYSE:SNE) PlayStation, and Amazon.com (NASDAQ:AMZN).
- Cable repercussions? Several pay TV operators had started lowering their price for HBO via promotions, a possible move to brace for HBO Now's direct launch: Comcast lowered its monthly HBO rate from $18.95 to $15, or $10 if you order online. Verizon's offering HBO for $9.99/month for first 12; Time Warner Cable is offering $9.99/month for online orders; Cox is offering $10/month for the first six.
- As for HBO Go -- the current service that allows mobile viewing for authenticated existing HBO customers -- it appears it will continue to exist as is for now, despite the likelihood of product confusion.
- HBO's targeting 10M broadband subscribers who don't have cable or satellite -- at this $15 price point, it makes a huge competitive interface with Netflix (NASDAQ:NFLX).
Wed, Mar. 4, 1:58 PM
- A day after slumping to new post-IPO lows and coming within $0.03 of $80, Alibaba (NYSE:BABA) has seen dip-buyers emerge in large numbers. Naturally, Yahoo (NASDAQ:YHOO) is along for the ride.
- The gains come as a Chinese publication reports Jack Ma once said he considered acquiring Yahoo, which plans to spin off its Alibaba stake into a publicly-traded company in Q4. Ma's alleged comments: "The acquisition of Yahoo is something I worked [on] a couple of years ago, this is a political problem, not an economic problem, Yahoo is a media [company], more sensitive."
- There has already been speculation Alibaba will try to buy Yahoo's spinoff (much less politically challenging than buying the whole of Yahoo) at some point. Bloomberg's Matt Levine has noted the spinoff will have to wait a year before a deal occurs, in order to maintain its tax-free status.
- Meanwhile, Alibaba's Aliyun cloud services unit (a giant in the Chinese cloud infrastructure market) has opened a Silicon Valley data center, its first in the U.S. For now, the data center will cater to Chinese companies with U.S. operations, but it plans to go after non-Chinese clients later this year. When it does, Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), and a slew of other incumbents will be waiting.
Tue, Mar. 3, 3:58 PM
- As part of a growing move into digital services, mega-telecom Telefonica (NYSE:TEF) says that it plans a voice-command search engine to compete with Google Now (NASDAQ:GOOG), Apple's Siri (NASDAQ:AAPL) and Microsoft's Cortana (NASDAQ:MSFT).
- The offering, detailed by the company's Ana Segurado in an interview at Mobile World Congress, was developed by Spanish firm Sherpa working with Telefonica on an "alternative to traditional search" for smartphones. Sherpa has a search app on Google Play.
- Segurado is managing director of Telefonica's Open Future unit, working on startup support and venture capital investments.
- In a fall query test, Google Now dominated competitors in accurately answering questions.
- Previously: Report: Google talks with H-P about bringing Now to enterprise (Aug. 13 2014)
Mon, Mar. 2, 12:51 PM
- In a deal that furthers Microsoft's (MSFT +0.4%) iOS/Android push, the company's Skype, OneDrive, and OneNote apps are pre-installed on Samsung's just-launched Galaxy S6 and S6 Edge, and placed within a "Microsoft Apps" folder pinned to the phones' home screens.
- S6/S6 Edge users also get 115GB of free OneDrive storage. Microsoft's Office apps weren't found on demo units, but past rumors suggest they could be part of the package. The deal comes after Microsoft and Samsung ended their Android royalty squabble.
- Meanwhile, Microsoft has launched the Lumia 640 and 640XL, new mid-range Windows Phones that come with a free year of Office 365 Personal (normally costs $70). The 640 has a 5" 720p display, and respectively sells for $155 (3G) and $178 (3G/4G). The 640XL has a 5.7" 720p display, and sells for $211 (3G) and $245 (3G/4G). Both devices use Qualcomm's quad-core/mid-range Snapdragon 400 processor.
- The software giant has also announced it won't release a new flagship Lumia until the mobile version of Windows 10 is ready. IDC estimates Windows Phone had a 2.8% smartphone unit share in Q4, down from 3% a year earlier.
Thu, Feb. 26, 2:25 PM
- The Nikkei and Chinese media report Microsoft (MSFT -0.1%) plans to cut 9K jobs at two Chinese phone manufacturing plants that originally belonged to Nokia. A local Microsoft exec is quoted as saying the plants will be shuttered by the end of March, with production capacity transferred to Vietnam.
- Microsoft announced last July it's cutting 12.5K phone division jobs, and 18K within the company overall. The software giant is in the midst of significantly paring back the division's declining feature phone ops; it sold 39.7M non-Lumia phones in the December quarter to go with 10.5M Lumias.
- The job cuts come as Microsoft continues dealing with a Chinese antitrust probe, and a far-reaching effort by China to lower its dependence on foreign tech suppliers. The company laid off its Chinese Xbox R&D team last fall.
Fri, Feb. 20, 7:31 PM
- Though more complex to run that standard public cloud solutions, hybrid clouds are "likely to grow as a percentage of total cloud deployments in the next two to three years" due to strong corporate interest, argues Pac Crest's Brendan Barnicle. He expects Microsoft (NASDAQ:MSFT), which has made an aggressive hybrid cloud push via Azure and its integrations with various on-premise Microsoft products, to benefit.
- While Amazon and Google overwhelmingly focus on public cloud services, Barnicle observes many enterprises are more partial to a hybrid approach in which mission-critical apps and data are kept on-premise, while other workloads are moved to public clouds. He also points out hybrid clouds enable new backup, disaster recovery, and archiving services, among others.
- In addition, Barnicle argues a server upgrade cycle resulting from Microsoft's ending of Windows Server 2003 support (set for July 14) will boost Azure demand. "We believe many of these customers will be upgrading to Windows Server 2012 R2, which would allow hybrid cloud deployments. Additionally, most of the SMB customers that need to upgrade are likely to transition to a public cloud solution such as Azure."
- Rackspace, IBM, and other backers of the OpenStack cloud infrastructure platform are also betting heavily on hybrid clouds. Meanwhile, Google struck a deal last month with VMware to make several Google public cloud services available on VMware's vCloud Air hybrid cloud platform.
- Microsoft hasn't broken out Azure's revenue by itself. The company did recently announce its Commercial Cloud revenue (covers Azure, Office 365 for businesses, and other offerings) is now on a $5.5B/year run rate.
Wed, Feb. 18, 12:15 PM
- Down AH yesterday due to the light sales guidance provided with its mixed Q4 results, Rackspace (RAX +1.4%) is now back above $50. Helping its cause: Pac Crest has upgraded to Outperform, and at least four firms have hiked their targets.
- Pac Crest cites enterprise and OpenStack momentum as reasons for upgrading: "In the second half of 2014, Rackspace won more large enterprise contracts worth at least $100,000 per month than it had in the prior five quarters combined ... management indicated that OpenStack now makes up more than 50% of its public cloud revenue, which implies OpenStack revenue is at least 15.6% of its total revenue."
- Cowen (target hiked to $75) now considers it likely Rackspace "will announce support for a mega cloud provider in 1H15," thereby boosting its long-term addressable market and lowering future capex needs (in exchange for sharing revenue). It adds sales guidance was in-line after adjusting for forex, and that EBITDA margin guidance was better than expected.
- Meanwhile, new CEO Taylor Rhodes argues the cloud infrastructure (IaaS) market's price war is calming down. "Amazon Web Services (NASDAQ:AMZN) in November, for the first time, didn’t make a price cut move ... AWS is feeling like they are the reference brand leader, that they are strong versus Google (NASDAQ:GOOG), so they don’t need to do it as much. Microsoft (NASDAQ:MSFT) is cutting price, but who knows how much share they are actually taking."
- He also reiterates Rackspace's assertion that its OpenStack/hybrid cloud offerings are differentiated in the battle for enterprise accounts. "The mainstream market has two problems: They have legacy apps that won’t go [to multi-tenant public clouds] automatically ... the second problem they have is this skills set gap ... There is a need for software and tools development."
- Q4 results, guidance/details
Tue, Feb. 17, 10:30 AM
- 7 of the 8 firms launching coverage on Box (BOX -2.6%) following the end of its underwriter quiet period have provided neutral writing, generally citing valuation as their reason for doing so.
- Though launching coverage at Neutral due to the company's multiples, JPMorgan praises "Box's differentiated focus on rich and complex features for corporate IT departments, spanning security, compliance, workflow and auditing."
- Morgan Stanley (Equal-Weight) predicts "a growing enterprise ecosystem will offset competitive pressures over time," but also considers a current enterprise value of 7x 2016E sales fair in light of "near-term limits on growth and margins."
- Credit Suisse (Outperform) is the sole firm to give Box a bullish rating, arguing the company offer a better enterprise file-syncing/sharing platform than top rival Microsoft, and that it "has sufficient lead time to further improve its competitive position and expand its user base."
- Speaking of Microsoft (NASDAQ:MSFT), Box has announced it's joining Citrix and Salesforce as initial members of the software giant's Cloud Storage Partner Program. The deal allows Box's services to be integrated with the Office iOS apps, and more deeply connected to Office Online. Box/Office 365 integration already exists, as does a partnership between Microsoft and Dropbox.
- Previously: Box CEO makes long-term case
Thu, Feb. 12, 1:11 PM
- Israel's Globes and Calcalist report Microsoft (MSFT +1%) is acquiring N-trig, a local developer of digital styluses and stylus/touch controller chips. Both suggest the deal price is around $200M.
- With N-trig's technology powering Surface tablet styluses, Microsoft already accounts for 79% of the company's revenue. N-trig has raised $130M via 8 funding rounds, but had less than $5M in cash left as of June 2014. Plans for a Tel Aviv IPO were cancelled last year.
- A common sight on pre-iPhone smartphones, styluses are now most notably used with Surface tablets and (courtesy of Samsung's proprietary S-Pen) Samsung's Galaxy Note line. However, there are also plenty of 3rd-party stylus accessories available for the iPad and Android tablets, and rumors that Apple will offer a stylus for an upcoming 12.9" iPad aimed at business users and creative professionals.
- Separately, Microsoft has confirmed its acquisition of calendar app maker Sunrise; TechCrunch reported last week the deal features a $100M+ price.
- Other recent acquisitions: Revolution Analytics, Equivio, HockeyApp
Tue, Feb. 10, 10:08 AM
- Six months after filing a contract dispute suit with Samsung (OTC:SSNLF) over unpaid Android royalties, Microsoft (MSFT -0.2%) says it has settled the dispute. Terms are confidential.
- Microsoft previously suggested Samsung stopped paying royalties in late 2013, with the electronics giant arguing the Nokia deal (by making Microsoft a phone manufacturer itself) nullifies the 2011 Microsoft/Samsung deal and requires a new cross-licensing agreement to be inked.
- The bottom-line impact of a settlement could be big: Samsung paid $1B in royalties to Microsoft in 2013 (pure gross profit, or close to it), and Samsung, though losing ground in recent quarters, still maintained a 20% Q4 global smartphone share, per IDC.
- Microsoft's total "Windows Phone" licensing revenue (includes Android royalties) amounted to $2.54B in FY14 (ended June '14). Nokia licensing payments (no longer being made) accounted for $382M of the figure.
Mon, Feb. 9, 1:57 PM
- Shortly after Reuters reported Microsoft (MSFT +0.1%) is expected to raise $7B through a debt offering (and has seen over $26B in orders), Bloomberg reports the offering has been upsized by $3.75B thanks to strong demand.
- The reported offering size would make the debt sale Microsoft's largest ever, and serve to increase its total debt load to ~$39B. The company's buyback pace might soon accelerate sharply from the December quarter's $2.1B.
Mon, Feb. 9, 11:26 AM
- With the company having recently promised to use up the $31B remaining on its $40B buyback authorization by the end of 2016, Microsoft (MSFT +0.4%) is tapping debt markets again, offering both floating-rate notes and multiple tranches of fixed-rate notes.
- The prospectus doesn't provide an offering size or maturity dates, but Reuters reports $7B worth of debt is expected to be sold, over $26B in orders have been taken in, and that maturities range from 5 to 40 years.
- Not surprisingly, Moody's has granted the debt an Aaa (Prime) rating. Also unsurprising are the low reported interest rates: 5-year, 10-year, and 30-year debt tranches are said to respectively carry interest rates just 55 bps, 95 bps, and 140-145 bps above comparable Treasurys.
- Microsoft sold $8B in dollar and euro-denominated notes in late 2013. The company had $103B in cash/investments (much of it offshore) at the end of December, and $28B in debt.
- Update (2:25PM): Bloomberg reports the offering has been upsized to $10.75B.
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