How Microsoft will hit its $1 trillion valuation
The No. 2 cloud provider is set up for success. In the next five years, $23 billion of the total $57 billion Microsoft is expected to earn in revenue is set to come from the company's Azure cloud platform, according to a Markets Insider report.
Experts foresee the tech company increasing its cloud business margins following strong performance in 2017. Azure annualized revenue hit the long-time goal of $20 billion ahead of schedule this October.
Other projections have Microsoft reaching a $1 trillion valuation by 2020, reports Seeking Alpha. Alongside Azure, Microsoft 365 will be a key growth driver, bringing in an expected $26.9 billion in sales by FY21 — $5 billion of which will stem from Office 365 sales.
Behind Apple and Alphabet, Microsoft is third in the race for the $1 trillion market cap and has well over $300 billion to go.
But whether or not the company reaches $1 trillion first, Microsoft is poised to continued industry dominance for the coming years. Its cloud platform has demonstrated strong growth over the last few years and is contributing to the steady "growth erosion" of No. 1 AWS.
The steady expansion of an enterprise focus, from cloud and AI to collaboration platforms and software, made Microsoft one of the most powerful enterprise tech companies today — not to mention CIO Dive's Company of the Year for 2017.
Familiarity with Microsoft products from Office software makes the move to Azure a natural transition for many enterprise customers, and an increasingly well-rounded business portfolio is steadily making the legacy company close to a one-stop shop.
As the sixth best managed company in the U.S. with high scores across customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength, Microsoft is in a position to remain a leading company, even when compared across sectors.
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