Please write the microsofts’ porter’s five forces, and compare with Amazon and Facebook.

20180210213156software_industry__global 20180210213154microsoft__market_line 20180210213159software_industry__united_states

Global – Software & Services 0199 – 2139 – 2015

MarketLine

Industry Profile

Global Software &
Services
November 2015

Reference Code: 0199-2139

Publication Date: November 2015

WWW.MARKETLINE.COM

MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED

A Progressive Digital Media business

http://www.marketlineinfo.com/

Global – Software & Services 0199 – 2139 – 2015

EXECUTIVE SUMMARY

Market value
The global software & services industry grew by 6.5% in 2015 to reach a value of $1,606.1 billion.

Market value forecast
In 2020, the global software & services industry is forecast to have a value of $2,156.3 billion, an increase of 34.3%

since 2015.

Category segmentation
It services is the largest segment of the global software & services industry, accounting for 58.3% of the industry’s total

value.

Geography segmentation
Asia-Pacific accounts for 35.8% of the global software & services industry value.

Market rivalry

Competition within the software & services market is boosted by constant advances in technology, by the presence of

large international incumbents and a regular supply of new entrants with alternative business models forcing players to

operate increasingly competitive pricing strategies.

Global – Software & Services 0199 – 2139 – 2015

TABLE OF CONTENTS

Executive Summary ……………………………………………………………………………………………………………………………………. 2

Market value …………………………………………………………………………………………………………………………………………… 2

Market value forecast ………………………………………………………………………………………………………………………………. 2

Category segmentation ……………………………………………………………………………………………………………………………. 2

Geography segmentation …………………………………………………………………………………………………………………………. 2

Market rivalry ………………………………………………………………………………………………………………………………………….. 2

Market Overview ………………………………………………………………………………………………………………………………………… 7

Market definition ……………………………………………………………………………………………………………………………………… 7

Market analysis ………………………………………………………………………………………………………………………………………. 7

Market Data ………………………………………………………………………………………………………………………………………………. 8

Market value …………………………………………………………………………………………………………………………………………… 8

Market Segmentation ………………………………………………………………………………………………………………………………….. 9

Category segmentation ……………………………………………………………………………………………………………………………. 9

Geography segmentation ……………………………………………………………………………………………………………………….. 10

Market Outlook …………………………………………………………………………………………………………………………………………. 11

Market value forecast …………………………………………………………………………………………………………………………….. 11

Five Forces Analysis …………………………………………………………………………………………………………………………………. 12

Summary ……………………………………………………………………………………………………………………………………………… 12

Buyer power …………………………………………………………………………………………………………………………………………. 14

Supplier power ……………………………………………………………………………………………………………………………………… 16

New entrants ………………………………………………………………………………………………………………………………………… 17

Threat of substitutes ………………………………………………………………………………………………………………………………. 19

Degree of rivalry ……………………………………………………………………………………………………………………………………. 21

Leading Companies ………………………………………………………………………………………………………………………………….. 23

Hewlett Packard Company ……………………………………………………………………………………………………………………… 23

International Business Machines Corporation ……………………………………………………………………………………………. 28

Microsoft Corporation …………………………………………………………………………………………………………………………….. 32

Oracle Corporation ………………………………………………………………………………………………………………………………… 36

Methodology…………………………………………………………………………………………………………………………………………….. 41

Industry associations ……………………………………………………………………………………………………………………………… 42

Related MarketLine research ………………………………………………………………………………………………………………….. 42

Appendix …………………………………………………………………………………………………………………………………………………. 43

Global – Software & Services 0199 – 2139 – 2015

About MarketLine ………………………………………………………………………………………………………………………………….. 43

Global – Software & Services 0199 – 2139 – 2015

LIST OF TABLES

Table 1: Global software & services industry value: $ billion, 2011–15 ……………………………………………………………….. 8

Table 2: Global software & services industry category segmentation: $ billion, 2015 ……………………………………………. 9

Table 3: Global software & services industry geography segmentation: $ billion, 2015 ……………………………………….. 10

Table 4: Global software & services industry value forecast: $ billion, 2015–20 …………………………………………………. 11

Table 5: Hewlett Packard Company: key facts ………………………………………………………………………………………………. 23

Table 6: Hewlett Packard Company: key financials ($) …………………………………………………………………………………… 25

Table 7: Hewlett Packard Company: key financial ratios ………………………………………………………………………………… 26

Table 8: International Business Machines Corporation: key facts …………………………………………………………………….. 28

Table 9: International Business Machines Corporation: key financials ($) …………………………………………………………. 29

Table 10: International Business Machines Corporation: key financial ratios ……………………………………………………… 30

Table 11: Microsoft Corporation: key facts ……………………………………………………………………………………………………. 32

Table 12: Microsoft Corporation: key financials ($) ………………………………………………………………………………………… 34

Table 13: Microsoft Corporation: key financial ratios ………………………………………………………………………………………. 34

Table 14: Oracle Corporation: key facts ……………………………………………………………………………………………………….. 36

Table 15: Oracle Corporation: key financials ($) ……………………………………………………………………………………………. 39

Table 16: Oracle Corporation: key financial ratios………………………………………………………………………………………….. 39

Global – Software & Services 0199 – 2139 – 2015

LIST OF FIGURES

Figure 1: Global software & services industry value: $ billion, 2011–15 ………………………………………………………………. 8

Figure 2: Global software & services industry category segmentation: % share, by value, 2015 …………………………….. 9

Figure 3: Global software & services industry geography segmentation: % share, by value, 2015 ……………………….. 10

Figure 4: Global software & services industry value forecast: $ billion, 2015–20 ………………………………………………… 11

Figure 5: Forces driving competition in the global software & services industry, 2015…………………………………………. 12

Figure 6: Drivers of buyer power in the global software & services industry, 2015 ……………………………………………… 14

Figure 7: Drivers of supplier power in the global software & services industry, 2015 …………………………………………… 16

Figure 8: Factors influencing the likelihood of new entrants in the global software & services industry, 2015 …………. 17

Figure 9: Factors influencing the threat of substitutes in the global software & services industry, 2015 …………………. 19

Figure 10: Drivers of degree of rivalry in the global software & services industry, 2015 ………………………………………. 21

Figure 11: Hewlett Packard Company: revenues & profitability ……………………………………………………………………….. 26

Figure 12: Hewlett Packard Company: assets & liabilities ………………………………………………………………………………. 27

Figure 13: International Business Machines Corporation: revenues & profitability ………………………………………………. 30

Figure 14: International Business Machines Corporation: assets & liabilities ……………………………………………………… 31

Figure 15: Microsoft Corporation: revenues & profitability ……………………………………………………………………………….. 34

Figure 16: Microsoft Corporation: assets & liabilities ………………………………………………………………………………………. 35

Figure 17: Oracle Corporation: revenues & profitability …………………………………………………………………………………… 39

Figure 18: Oracle Corporation: assets & liabilities………………………………………………………………………………………….. 40

Global – Software & Services 0199 – 2139 – 2015

MARKET OVERVIEW

Market definition
The software and services market consists of two separate segments. The software segment includes systems and

application software. The IT services segment includes IT outsourcing & processing, IT consulting & support, and cloud

computing. Market value figures are assessed at manufacturer selling price (MSP), based on revenues accrued from

software sales, licenses and IT services agreements. Any currency conversions used in the creation of this report have

been calculated using constant 2014 annual average exchange rates.

For the purposes of this report, North America consists of Canada, Mexico, and the United States.

South America comprises Argentina, Brazil, Chile, Colombia, and Venezuela.

Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy,

Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.

Scandinavia comprises Denmark, Finland, Norway, and Sweden.

Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Kazakhstan, Japan, Malaysia, New Zealand,

Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.

Middle East comprises Egypt, Israel, Saudi Arabia, and United Arab Emirates.

Market analysis
The global software & services market is made up of a mixture of booming markets such as China and India and markets

with low growth such as Japan. Fluctuating growth in recent years is expected to turn to stable but slow deceleration

over the forecast period to 2020, with strong growth overall.

The IT services segment is fragmented despite the presence of large, international incumbents (IBM, HP, First Data

Corporation and Accenture), who together account for around 15% of the segment’s global revenues. These larger

players drive the widespread adoption of more advanced service offerings. The export-led nature of many IT services in

developing countries has allowed skilled workforces to build up and given firms the opportunity to begin to place more

focus on domestic markets.

The global software & services industry group had total revenues of $1,606.1bn in 2015, representing a compound

annual growth rate (CAGR) of 6.6% between 2011 and 2015. In comparison, the Asia-Pacific and US industry groups

grew with CAGRs of 10.7% and 5.3% respectively, over the same period, to reach respective values of $575.3bn and

$482.8bn in 2015.

China and the US are by far the biggest markets in terms of software segment revenues, together accounting for over

two thirds of the segment’s global market value.

The IT services segment was the industry group’s most lucrative in 2015, with total revenues of $935.7bn, equivalent to

58.3% of the industry group’s overall value. The software segment contributed revenues of $670.4bn in 2015, equating to

41.7% of the industry group’s aggregate value.

Cloud computing services are expected to achieve dynamic growth over the next few years as buyers expand the use of

data centers and advanced analytics in order to manage the vast amounts of data being produced in the connected

world. The positive impact of this transition on the overall market could be balanced by a decline in outsourcing &

processing services as many more tasks become automated through the use of artificial intelligence-based algorithms.

The performance of the industry group is forecast to decelerate, with an anticipated CAGR of 6.1% for the five-year

period 2015 – 2020, which is expected to drive the industry group to a value of $2,156.3bn by the end of 2020.

Comparatively, the Asia-Pacific and US industry groups will grow with CAGRs of 8.1% and 5.2% respectively, over the

same period, to reach respective values of $847.8bn and $621.3bn in 2020.

Global – Software & Services 0199 – 2139 – 2015

MARKET DATA

Market value
The global software & services industry grew by 6.5% in 2015 to reach a value of $1,606.1 billion.

The compound annual growth rate of the industry in the period 2011–15 was 6.6%.

Table 1: Global software & services industry value: $ billion, 2011–15

Year $ billion € billion % Growth

2011 1,241.9 934.5

2012 1,332.7 1,002.8 7.3%

2013 1,394.9 1,049.6 4.7%

2014 1,507.9 1,134.6 8.1%

2015 1,606.1 1,208.5 6.5%

CAGR: 2011–15 6.6%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 1: Global software & services industry value: $ billion, 2011–15

SOURCE: MARKETLINE M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

MARKET SEGMENTATION

Category segmentation
It services is the largest segment of the global software & services industry, accounting for 58.3% of the industry’s total
value.

The Software segment accounts for the remaining 41.7% of the industry.

Table 2: Global software & services industry category segmentation: $ billion, 2015

Category 2015 %

IT services 935.7 58.3%

Software 670.4 41.7%

Total 1,606.1 100%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 2: Global software & services industry category segmentation: % share, by value, 2015

SOURCE: MARKETLINE M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

Geography segmentation
Asia-Pacific accounts for 35.8% of the global software & services industry value.

United States accounts for a further 30.1% of the global industry.

Table 3: Global software & services industry geography segmentation: $ billion, 2015

Geography 2015 %

Asia-Pacific 575.3 35.8

United States 482.8 30.1

Europe 398.9 24.8

Middle East 30.5 1.9

Rest of the World 118.5 7.4

Total 1,606 100%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 3: Global software & services industry geography segmentation: % share, by value, 2015

SOURCE: MARKETLINE M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

MARKET OUTLOOK

Market value forecast
In 2020, the global software & services industry is forecast to have a value of $2,156.3 billion, an increase of 34.3%
since 2015.

The compound annual growth rate of the industry in the period 2015–20 is predicted to be 6.1%.

Table 4: Global software & services industry value forecast: $ billion, 2015–20

Year $ billion € billion % Growth
2015 1,606.1 1,208.5 6.5%

2016 1,712.6 1,288.7 6.6%

2017 1,821.7 1,370.7 6.4%

2018 1,933.7 1,455.0 6.2%

2019 2,048.5 1,541.4 5.9%

2020 2,156.3 1,622.5 5.3%

CAGR: 2015–20 6.1%

SOURCE: MARKETLINE M A R K E T L I N E

Figure 4: Global software & services industry value forecast: $ billion, 2015–20

SOURCE: MARKETLINE M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

FIVE FORCES ANALYSIS

The software & services market will be analyzed taking software publishers and providers of it services as players. The

key buyers will be taken as individual consumers, businesses and government agencies, and skilled employees as well

as providers of hardware and software as the key suppliers.

Summary

Figure 5: Forces driving competition in the global software & services industry, 2015

SOURCE: MARKETLINE M A R K E T L I N E

Competition within the software & services market is boosted by constant advances in technology, by the presence of
large international incumbents and a regular supply of new entrants with alternative business models forcing players to
operate increasingly competitive pricing strategies.

Market players within the software segment tend to be acquisitive and often enter into partnerships with other players ,

with niche players needing to rely on the underlying infrastructure and middleware software of competitors. The IT

services segment is evolving from offering services that improve productivity and efficiency such as outsourcing, to

providing value-added services such as analytics consulting; this increases rivalry as players seek to capture market

share in higher margin sectors.

Brand recognition is likely to be of significant importance to customers and they therefore often look to a reputable

company. This is particularly the case for players involved in IT outsourcing and data processing, where consistent

quality and security are key factors in winning contracts.

Market players require skilled programmers or consulting staff and powerful hardware to develop and maintain software

and up to date services. Some companies, such as Microsoft and IBM, are more diversified with their training and

certification, which allows them to produce a variety of software, services and hardware products. Hardware components

tend to be purchased from a sole supplier, thus increasing their power. On the other hand, some companies show some

backwards integration with software companies having hardware divisions and IT services companies having software

capabilities, which reduces their reliance on external suppliers.

The positive outlook of the market, combined with easy access to the Internet as a distribution channel appeals to new

entrants. Strong market growth also helps to ease competition amongst incumbent players, together with a certain level

of diversification between players in the type of end-user and product portfolio.

Global – Software & Services 0199 – 2139 – 2015

The threat of substitutes is strong in the software segment, with IT services spreading into traditional software license

based territory, especially with respect to readily available, free open-source software applications. Open-source

software is becoming an increasingly credible service-backed business model, with companies such as US-based Red

Hat doing well and Google’s Android platform paving the way for the widespread acceptance of open-source code. High

level of piracy in certain countries has had a significant effect on the software & services industry in terms of business

models and routes to market.

Global – Software & Services 0199 – 2139 – 2015

Buyer power

Figure 6: Drivers of buyer power in the global software & services industry, 2015

SOURCE: MARKETLINE M A R K E T L I N E

The software & services market has many buyers: individual consumers, businesses of all sizes, and government

institutions. Business buyers come from a very wide range of industries, including but not limited to banking, retail,

logistics, telecommunications and healthcare. Buyers may be reliant on particular players as software is often industry-

specific and service contracts can last several years, and thus switching costs can be high. Larger buyers, with greater

financial muscle, exert more buyer power. The software segment benefits from the fact that software is now an

indispensable aspect of many businesses, reducing buyer power.

Brand recognition is likely to be of significant importance to customers, particularly when it comes to electronic data

processing. Buyers will often look to a reputable company for such services; this is especially so for government

contracts, which have heightened media scrutiny in terms of IT failures. The services offered by industry players can

often be highly important to the successful operation of a business, which reduces buyer power considerably.

Switching costs for software buyers may be lowered by players partnering up to deliver applications that foster

interoperability. For example, SAP’s business processes can be accessed by customers through Microsoft Office using

‘Duet’ or through IBM’s Lotus Notes using ‘Alloy’.

In addition, software buyers may choose freely available open-source products, which offer similar functionality to closed

source software. For example, OpenOffice can be used instead of Microsoft Office in the office applications market and

Linux can be used instead of Windows in the operating system market. There is also a concurrent move to software-as-

a-service (SaaS) where buyers pay through regular subscriptions or as and when they use the software, which is hosted

and managed remotely by the SaaS provider and can be accessed via the Internet. This software variant requires lower

upfront costs and may be more accessible, thus also increasing buyer power. Major players are increasingly switching to

SaaS business models due to the march towards cloud computing and open source software.

Full backwards integration by buyers is rather unlikely even where in-house IT services and software development may

exist. This may decrease buyer power, however, it is mitigated by the fact that players are reluctant to integrate forwards

into the buyer area of operation as buyers tend to operate in completely different business areas.

Global – Software & Services 0199 – 2139 – 2015

IT services in particular are becoming increasingly undifferentiated, which has given rise to strong price competition and

driven reductions in labor costs and the subsequent relocation of multinational providers to low-cost locations. This

shows the power that buyers have in influencing player practice.

Overall buyer power is assessed as moderate.

Global – Software & Services 0199 – 2139 – 2015

Supplier power

Figure 7: Drivers of supplier power in the global software & services industry, 2015

SOURCE: MARKETLINE M A R K E T L I N E

The software & services market requires employees with specific technical knowledge and adaptable know-how, as well

as the most up-to-date hardware devices. Industry players rely on the continued service of qualified employees, and high

rates of staff turnover can be detrimental to the business. This can be regarded as a high switching cost, with employees

viewed as suppliers of such expertise. Competition for talented developers and consultants is strong amongst the major

players. In the software segment for example, Microsoft’s Developer Training and Certification initiative specifically

promotes investment in this key factor. Equally, there is a large available workforce and strong competition amongst

employees to develop innovations and get noticed by employers, which reduces their power to some extent.

Suppliers of technological infrastructure play an important role in developing markets, as their progress is closely linked

to the ability of players to expand.

Inputs such as hardware components are often purchased from sole suppliers. Such suppliers are often large companies

offering differentiated products with high quality, resulting in significant supplier power. Forward integration from

suppliers has been historically rare, as software production entails a highly complicated process with large amounts of

proprietary knowledge and IT services require a very different infrastructure to hardware manufacturing, which directly

weakens supplier power. On the other hand, companies such as IBM cover the full industry value chain with its own

hardware, software and services capabilities, which reduces its reliance on external suppliers significantly.

Further highlighting the tight links between each segment in this industry group, suppliers of software to IT services

players may begin to forwards integrate once more complex software is required to provide IT services linked to powerful

computers, offering parallel processing and advanced analytical techniques, which will increase supplier power.

Microsoft – a software focused company for example, announced a predictive analytics service based around its Azure

cloud platform in 2014.

Supplier power in this industry is strong overall.

Global – Software & Services 0199 – 2139 – 2015

New entrants

Figure 8: Factors influencing the likelihood of new entrants in the global software & services
industry, 2015

SOURCE: MARKETLINE M A R K E T L I N E

Software development and IT consultancy services are labor intensive, since ultimately they depend on skilled

employees. Relatively low capital requirements mean that market entry is eased in terms of hardware and a widening

labor market means good access to skilled personnel. Furthermore, access to distribution channels has been made

easier in recent years through the development and uptake by end-users of broadband Internet access. This allows

software and services to be purchased, delivered, and updated without the need for physical media or conventional

distribution channels, allowing good software and services to spread rapidly. Distribution is often limited by technological

infrastructure meaning new entrants to developing markets will find difficulties in expanding. The World Economic Forum

ranks the United States 7th (9th in 2013), Brazil 69th (60th in 2013), Germany 12th (13th in 2013), China 62nd (58th in

2013), and India 83rd (68th in 2013) out of 148 (144 in 2013) countries in terms of network readiness, which suggests

that the global market has very varied levels of development in terms of IT infrastructure.

Newcomers must choose their market segment carefully, as certain areas have very strong incumbents. For example,

Microsoft is dominant in the PC operating system segment and Symantec in the paid PC security space. Although major

players, such as Microsoft, have been embroiled in anti-trust lawsuits in the US, and patent wars are common between

major players, there are few specific regulatory requirements for software companies. Nonetheless, regulation in this

industry group is varied and is largely dependent on the service or product offered and the buyers involved. For example,

data processing services for financial institutions are often stringently regulated. In the US, they are subject to

examination by the Federal Financial Institutions Examination Council, an interagency body comprised of the federal

bank and thrift regulators and the National Credit Union Association. Restrictions on data flows between different

countries, with data centers often needing to be located within a particular country may restrict the expansion capabilities

of new entrants.

Global – Software & Services 0199 – 2139 – 2015

In a market where new products, and new kinds of products and services, are frequently launched, R&D investment is

important. Alternatively, a large company can obtain intellectual property through acquisition of the company that

originally generated it (such as Oracle’s acquisition of Java technology as a result of its takeover of Sun Microsystems,

or Google’s purchase of Android Inc). In the IT services segment, IBM stated in its 2014 annual report that it has spent

$17bn to date on more than 30 acquisitions relating to Big Data and analytics. Whilst either approach requires significant

funds, new entrants are likely to be more dynamic and may be able to offer rapid progression and share capital to

talented individuals.

The position of incumbents may be strengthened by knowledge of their customers’ business needs and associated long –

term relationships, their ownership of key intellectual property, and potentially high switching costs for buyers in certain

sectors. The operating system software segment is particularly affected by the power of incumbents with Microsoft

Windows being purchased by original equipment manufacturers to be pre-installed on devices prior to sale; the Google

Android platform needed the creation of entirely new computer devices such as tablets and smartphones before it was

able to compete effectively in the operating system market.

Entry on a small scale is achievable in the IT consultancy market. Similarly, buyers seek to cut costs wherever possible

and data processing and other business processes have increasingly been outsourced to specialists, allowing clients to

focus on core activities. Newly developing niche markets will offer opportunities for smaller players in areas such as

green IT and the ‘Internet of Things’. Equally, industry specialists operating in key markets such as healthcare and

finance have significant opportunities.

Growth is expected to continue, which continues to offer an attractive prospect to potential new entrants.

The likelihood of new entrants to this industry is assessed as strong.

Global – Software & Services 0199 – 2139 – 2015

Threat of substitutes

Figure 9: Factors influencing the threat of substitutes in the global software & services industry,
2015

SOURCE: MARKETLINE M A R K E T L I N E

There are few substitutes for software and services as such, yet each segment has the tendency to provide a substitute

for the other.

An alternative to a number of the IT services offered in this industry group is to employ and train in-house staff to provide

such services. In times of economic difficulty, some companies may rely on existing staff rather than third-party service

providers. However, services offered by industry players provide businesses with several key advantages. Key

employees may be released from performing non-core or administrative processes, allowing a company to concentrate

wholly on its core activities. The increasing automation of IT services will pose difficulties for many players as buyers

seek to bring more and more services in-house. This will also allow the service arms of hardware and software suppliers

to act as substitutes for traditional IT services players. Equally, professional services firms such as KPMG are

increasingly offering IT services due to the relative ease of replicating service models.

From the perspective of the major software players, substitutes in this segment are open-source software products and

IT services, free web-based applications, and pirated versions of existing products. Rather than fund their business on

big-ticket license contracts, open-source companies, such as Red Hat, receive revenues from services and

maintenance. Open-source software is a beneficial alternative for many end-users. This is because most allow users to

redistribute the software and adapt it themselves. Also, it has been argued that because the source code for open-

source software is accessible to a large community of users and developers (in fact these two groups overlap in open-

source development), bugs and security weaknesses can be identified and corrected more quickly than for closed-

source products. It is often a lower cost alternative and has been particularly successful in website and web application

development, with coding platforms such as Ruby on Rails and Twitter’s Bootstrap code being used by many websites.

The advent of websites such as GitHub and Stack Overflow give open-source programmers access to a wealth of

information that is unavailable to users of dominant software, such as Microsoft’s products. However, open-source

products in general may present difficulties with compatibility and the expertise required to use them.

Global – Software & Services 0199 – 2139 – 2015

The availability of applications on the Internet has also caused major piracy issues. The most recent Global Unlicensed

Software Study, published by the Business Software Alliance in 2013, estimates that the worldwide piracy rate is around

43% compared to 42% in 2012. Software security and the use of alternative service based business models have

therefore become important for players combating free substitutes.

Overall, the threat of substitutes is moderate.

Global – Software & Services 0199 – 2139 – 2015

Degree of rivalry

Figure 10: Drivers of degree of rivalry in the global software & services industry, 2015

SOURCE: MARKETLINE M A R K E T L I N E

The industry is fragmented despite the presence of large, international incumbents (Microsoft, IBM, HP, and Oracle). The

number of competitors varies between countries with the US, for example, having more than 100,000 software and IT

services companies with over 99% being SMEs, which increases rivalry in comparison to somewhere like Brazil, which

has around 2,930 IT services companies.

Companies may dominate in particular areas, such as Oracle, which focuses on databases and middleware. However,

the largest companies offer a broad portfolio of products; IBM provides a variety of services, develops software and

makes mainframe computers for instance, while Microsoft also makes consumer electronics. In addition, Microsoft and

IBM sell to individual consumers as well as businesses. Diversification, which helps to defend revenues from decline in a

particular segment, tends to decrease rivalry, whereas the large size of major players increases competition. In addition,

developments in social network, mobile, analytic and cloud technologies have begun to allow players to offer more value-

added services, which has increased rivalry in terms of intellectual property and the need for perpetual innovation.

Since international expansion can be relatively fast with distribution over the Internet, competition over profit margins is

likely to increase rivalry, which is epitomized by the development of the open-source software market. Oracle now offers

some database software, such as MySQL, as open-source in order to make sure it is not bypassed by the likes of

MongoDB. The globalized nature of the industry also increases rivalry with regard to cost reduction, which has driven the

rapid expansion of export services in countries such as India, where competitive contractual terms are key success

factors. This has historically been linked to labor costs but may develop into data storage costs as increasing amounts of

data are being created and restrictions on data flows mean that data centers will proliferate. Having said that, security

and secrecy are also key factors in terms of data storage, which is perhaps why traditional tax havens top the list of

countries with the most secure internet servers per 1 million people (Liechtenstein, Monaco, Switzerland, Luxembourg,

the Isle of Man and the Cayman Islands are all in the top ten).

The software segment is well known for pursuing patent litigation, particularly among the major players. For example,

Oracle has had lawsuits against Google and SAP claiming patent and copyright infringement. Due to the high profits that

can be made on a global basis, the technology industry is also subject to patent ‘trolls’, who seek to purchase patents

rather than develop and sell software, simply to file lawsuits and obtain license fees.

Global – Software & Services 0199 – 2139 – 2015

Rivalry within this industry group is alleviated to an extent by good growth in recent years, which helps to prevent zero –

sum gains.

Overall, rivalry is strong.

Global – Software & Services 0199 – 2139 – 2015

LEADING COMPANIES

Hewlett Packard Company

Table 5: Hewlett Packard Company: key facts

Head office: 3000 Hanover Street, Palo Alto, California 94304 1185, USA

Telephone: 1 650 857 1501

Fax: 1 650 857 5518

Website: www.hp.com

Financial year-end: October

Ticker: HPQ

Stock exchange: New York

SOURCE: COMPANY WEBSITE M A R K E T L I N E

Hewlett-Packard Company (HP or “the company”) offers information technology (IT) products spanning printing, personal

systems, software, services and IT infrastructure. The company’s offerings include personal computing and other access

devices; imaging and printing-related products and services; enterprise IT infrastructure, including enterprise server and

storage technology, networking products and solutions, technology support and maintenance; multi-vendor customer

services, including technology consulting, outsourcing and support services across infrastructure, applications and

business process domains; and IT management software, application testing and delivery software, information

management solutions, big data analytics, security intelligence and risk management solutions. The company has

operations in the Americas, Europe, Middle East, Africa (EMEA) and Asia-Pacific.

HP’s operations span across seven business segments: Personal Systems, Enterprise Group, Printing, Enterprise

Services, Software, HP Financial Services (HPFS), and Corporate Investments.

The Personal Systems segment offers commercial personal computers (PCs), consumer PCs, workstations, thin client

PCs, tablets, retail point-of-sale (POS) systems, calculators and other related accessories, software, and support and

services for the commercial and consumer markets. The company’s commercial and consumer PCs and tablets are

based on the Windows operating system and uses processors from Intel and Advanced Micro Devices (AMD).

Commercial PCs cater to the commercial markets including, enterprise and, small and medium business (SMB)

customers. The company’s commercial PCs include workstations and consumer PCs include multi-media consumer

notebooks, consumer tablets, hybrids and desktops, as well as the touch-enabled notebooks and all-in- one desktops.

The company’s Enterprise Group provides a portfolio of enterprise technology infrastructure solutions for several

operating environments. The enterprise technology infrastructure offers a portfolio of servers, storage, networking, and

technology services. The Enterprise Group offers industry standard servers, business critical systems, storage,

networking, and technology services. The industry standard servers include microservers, towers, traditional rack,

density-optimized rack and blades, as well as solutions for large, distributed computing companies. The company

delivers business critical systems with a portfolio of HP Integrity servers as well as HP Integrity NonStop solutions and

mission-critical x86 ProLiant servers. The storage offerings include storage platforms for enterprise and SMB

environments. Traditional storage solutions include tape, storage networking and legacy external disk products. It also

offers converged storage solutions, including 3PAR StoreServ, StoreOnce and StoreVirtual products.

Global – Software & Services 0199 – 2139 – 2015

Enterprise Group’s networking solutions include switches, routers, wireless local area network (WLAN), and network

management products used in solutions for data center, campus and branch networks. The company’s unified wired and

wireless networking offerings include WLAN access points, controllers and switches, which are based on FlexNetwork

architecture. HP’s software-defined networking (SDN) offers an end-to-end solution for automation of network from data

center to campus and branch. The technology services offered by this segment include support services and technology

consulting, focused on cloud, mobility and big data. The support services include HP Foundation Care, a portfolio of

reactive hardware and software support services; HP Proactive Care, which combines remote support technology for

real-time monitoring; HP Datacenter Care, an end-to-end support for HP and multi-vendor systems that enables

customers to build and operate IT in traditional, cloud or hybrid cloud environments; and Lifecycle Event services, which

are event-based services offering consulting for each phase of the technology life cycle.

The company’s Printing segment provides consumer and commercial printer hardware, supplies, media, software and

services, as well as scanning devices. It also offers imaging solutions in the commercial markets. The imaging solutions

encompass managed print services (MPS) for industrial applications, outdoor signage, and the graphic arts businesses.

Printing segment’s Laserjet and Enterprise solutions offer LaserJet and enterprise products, services and solutions to the

SMBs and enterprise segments including LaserJet printers and supplies (toner), Officejet Pro X inkjet enterprise products

and supplies, multi-function devices, scanners, web-connected hardware, managed services, and enterprise software

solutions. The MPS offered by the company include printing equipment, supplies, support, workflow optimization and

security features for SMBs and enterprise customers, utilizing proprietary HP tools and fleet management solutions, as

well as third-party software. Inkjet and printing solutions deliver inkjet solutions; and single function and all-in-one inkjet

printers for consumer and SMBs. The graphic solutions offered by the Printing segment include large format printers,

specialty printing, digital press solutions, supplies and services to print service providers. Graphic solutions cover a

range of printing applications such as technical design, photos, sign and display, direct mail, marketing collateral, labels

and packaging, and publishing. The Printing segment’s software and web services deliver a suite of offerings, including

photo-storage and printing offerings, document storage, entertainment services, web-connected printing, and PC back-

up and related services.

HP’s Enterprise Services segment provides technology consulting, outsourcing and support services across

infrastructure, applications and business process domains. The segment includes infrastructure technology outsourcing,

and application and business services. Infrastructure technology outsourcing services encompass the management of

data centers, IT security, cloud computing, workplace technology, networks, unified communications, and enterprise

service management. It also offers a set of managed services that provide infrastructure services for smaller, discrete

engagements. The application and business services encompass application development, testing, modernization,

system integration, maintenance and management for both packaged and custom-built applications and cloud offerings.

The service portfolio of application and business services also includes intellectual property-based industry solutions,

services and technologies to help clients better manage critical business processes, such as customer relationship

management, finance and administration, human resources, payroll and document processing.

HP’s Software segment provides IT management, application testing and delivery, information management, big data

analytics, security intelligence and risk management solutions for businesses and enterprises. Its software offerings

include licenses, support, professional services and software-as-a-service (SaaS). The company’s global business

capabilities within the Software segment include application delivery management, big data, enterprise security, IT

operations management, and marketing optimization.

Global – Software & Services 0199 – 2139 – 2015

Application delivery management which is part of HP’s IT management offerings, provides software that enables

organizations to deliver performance applications by automating and testing the processes required to ensure the quality

and scalability of desktop, web, mobile and cloud-based applications. Big data provides a suite of software designed to

help organizations store, explore, govern, protect and serve information and insights. Its big data suite includes HP

Vertica, an analytics platform for machine, structured and semi-structured data; HP IDOL, an analytics platform for

human information from Autonomy, as well as solutions for archiving, data protection, eDiscovery, information

governance and enterprise content management. Enterprise security software is designed to disrupt fraud, hackers and

cyber criminals by scanning software and websites for security vulnerabilities, improving network defenses and providing

real-time warning of threats as they emerge. IT operations management which is part of HP’s IT management offerings

provides software required to automate routine IT tasks and to pinpoint IT problems. HP’s marketing optimization

provides solutions for augmented reality, contact center analytics, customer communications management and digital

experience management.

HPFS offers investment solutions such as leasing, financing, utility programs, and asset management services for large

enterprise customers and channel partners, along with an array of financial options to SMBs, educational and

governmental entities.

The Corporate Investments segment of the company includes HP Labs, and certain cloud-related business incubation

projects among others.

On October 6, 2014, HP declared its intention to split its business and form two independent, publicly traded companies,

one with a focus on personal systems and printing, the other on enterprise services. Hewlett-Packard Enterprise will

consist of the existing Enterprise Group, Enterprise Services, Software, HP Financial Services, and Corporate

Investments segments, which combined accounted for 51.5% of Hewlett-Packard’s total revenues in FY2013. HP Inc. will

comprise the existing Personal Systems and Printing segments and will therefore target the laptop, desktop PC, tablet,

and printing markets.

Key Metrics

The company recorded revenues of $111,454 million in the fiscal year ending October 2014, a decrease of .8%

compared to fiscal 2013. Its net income was $5,013 million in fiscal 2014, compared to a net income of $5,113 million in

the

preceding year.

Table 6: Hewlett Packard Company: key financials ($)

$ million 2010 2011 2012 2013 2014

Revenues 126,003.0 127,245.0 120,357.0 112,298.0 111,454.0

Net income (loss) 8,761.0 7,074.0 (12,650.0) 5,113.0 5,013.0

Total assets 124,503.0 129,517.0 108,768.0 105,676.0 103,206.0

Total liabilities 83,722.0 90,513.0 85,935.0 78,020.0 76,079.0

Employees 324,600 349,600 331,800 317,500 302,000

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

Table 7: Hewlett Packard Company: key financial ratios

Ratio 2010 2011 2012 2013 2014

Profit margin 7.0% 5.6% (10.5%) 4.6% 4.5%

Revenue growth 10.0% 1.0% (5.4%) (6.7%) (0.8%)

Asset growth 8.5% 4.0% (16.0%) (2.8%) (2.3%)

Liabilities growth 13.1% 8.1% (5.1%) (9.2%) (2.5%)

Debt/asset ratio 67.2% 69.9% 79.0% 73.8% 73.7%

Return on assets 7.3% 5.6% (10.6%) 4.8% 4.8%

Revenue per employee $388,179 $363,973 $362,740 $353,694 $369,053

Profit per employee $26,990 $20,235 ($38,125) $16,104 $16,599

SOURCE: COMPANY FILINGS M A R K E T L I N E

Figure 11: Hewlett Packard Company: revenues & profitability

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

Figure 12: Hewlett Packard Company: assets & liabilities

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

International Business Machines Corporation

Table 8: International Business Machines Corporation: key facts

Head office: 1 New Orchard Road, Armonk, New York 10504, USA

Telephone: 1 914 499 1900

Website: www.ibm.com

Financial year-end: December

Ticker: IBM

Stock exchange: New York

SOURCE: COMPANY WEBSITE M A R K E T L I N E

International Business Machines Corporation (IBM or “the company”) is a global information technology (IT) company,

which provides a range of services, software, systems and fundamental research services. The company also offers

related financing services for its clients. The company has a global presence, operating in countries across Americas,

Europe, Middle East, Africa and Asia Pacific.

The company’s operations span across five business segments: Global Technology Services (GTS), Software, Global

Business Services (GBS), Systems and Technology (STG), and Global Financing.

The GTS segment primarily provides IT infrastructure and business process services, including strategic outsourcing

services, global process services, integrated technology services, cloud services, and technology support services.

Strategic outsourcing services include the delivery of comprehensive IT outsourcing services dedicated to transforming

clients’ existing infrastructures. Global process services deliver a range of transformational solutions including processing

platforms and business process outsourcing (BPO). Integrated technology services include a portfolio of project-based

and managed services that enable clients to transform and optimize their IT environments. IBM’s cloud services portfolio

includes private clouds, customized dedicated managed clouds, and standardized cloud infrastructure services. IBM

offers a line of support services from product maintenance through solution support.

The Software segment consists primarily of middleware and operating systems software. The company’s key software

capabilities include WebSphere, information management software, Watson solutions, Tivoli, workforce solutions,

rational software, and mobile software.

WebSphere software which is built on services-oriented architecture (SOA) and open standards support for cloud, mobile

and social interactions, is designed to enable organizations to integrate and manage business processes across their

organizations. IBM’s information management software enables clients to integrate, manage and analyze data from a

variety of sources. Its middleware and integrated solutions include advanced database management, information

integration, data governance, enterprise content management, data warehousing, business analytics and intelligence,

predictive analytics and big data analytics. The Watson solution is a cognitive computing platform that can interact in

natural language and process large amounts of big data to deliver insights with high speed and accuracy. Tivoli provides

clients visibility, control and automation across their end-to-end business operations. The company’s social workforce

solutions enable effective communication between people and processes through collaboration, messaging and social

networking software. Rational software supports software development for both IT and complex embedded system

solutions, with a portfolio of products and solutions supporting DevOps and Smarter Product Development. IBM’s mobile

software spans middleware and offers end-to-end mobile solutions across platform and application development, mobile

security, and mobile device management.

Global – Software & Services 0199 – 2139 – 2015

The GBS segment provides consulting and application management services. The company’s consulting and systems

integration business provides solutions in strategy and transformation, application innovation services, enterprise

applications and smarter analytics. The application management services portfolio includes application testing and

modernization, cloud application services, globally integrated capability model, industry knowledge and the

standardization and automation of application management.

IBM’s STG segment provides clients with infrastructure technologies to help meet the new requirements of data, cloud

and engagement from deploying advanced analytics, to moving to digital service delivery with the cloud, and securing

mobile transaction processing. In addition, the segment provides semiconductor technology, products and packaging

solutions for IBM’s own advanced technology needs. The segment’s capabilities include servers which comprise System

z, an enterprise platform for integrating data, transactions and insight; and Power Systems, a system designed from the

ground up for big data, optimized for scale-out cloud and Linux, and delivering open innovation with OpenPOWER.

STG’s data storage products and solutions are designed to address critical client requirements for information retention

and archiving, security, compliance and storage optimization including data deduplication, availability and virtualization.

The portfolio consists of a range of software defined storage solutions; disk and tape storage systems; and Flash storage

solutions.

IBM’s Global Financing segment facilitates clients’ acquisition of IBM systems, software and services. The segment

invests in financing assets, leverages with debt and manages the associated risks. The capabilities of the segment

include client financing, commercial financing, and remanufacturing and remarketing. Client financing includes lease and

loan financing to end users and internal clients for terms generally between one and seven years. Commercial financing

is short-term inventory and accounts receivable financing to dealers and remarketers of IT products. The company also

remanufactures and remarkets equipment, which is returned at the conclusion of a lease transaction after refurbishment

to new or existing clients both externally and internally.

Key Metrics

The company recorded revenues of $92,793 million in the fiscal year ending December 2014, a decrease of 5.7%

compared to fiscal 2013. Its net income was $15,751 million in fiscal 2014, compared to a net income of $16,881 million

in the preceding year.

Table 9: International Business Machines Corporation: key financials ($)

$ million 2010 2011 2012 2013 2014

Revenues 99,870.0 106,916.0 102,874.0 98,368.0 92,793.0

Net income (loss) 14,833.0 15,855.0 16,999.0 16,881.0 15,751.0

Total assets 113,452.0 116,433.0 119,213.0 126,223.0 117,532.0

Total liabilities 90,280.0 96,197.0 100,229.0 103,294.0 105,518.0

Employees 426,751 433,362 434,246 431,212 379,592

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

Table 10: International Business Machines Corporation: key financial ratios

Ratio 2010 2011 2012 2013 2014

Profit margin 14.9% 14.8% 16.5% 17.2% 17.0%

Revenue growth 4.3% 7.1% (3.8%) (4.4%) (5.7%)

Asset growth 4.1% 2.6% 2.4% 5.9% (6.9%)

Liabilities growth 4.7% 6.6% 4.2% 3.1% 2.2%

Debt/asset ratio 79.6% 82.6% 84.1% 81.8% 89.8%

Return on assets 13.3% 13.8% 14.4% 13.8% 12.9%

Revenue per employee $234,024 $246,713 $236,903 $228,120 $244,455

Profit per employee $34,758 $36,586 $39,146 $39,148 $41,495

SOURCE: COMPANY FILINGS M A R K E T L I N E

Figure 13: International Business Machines Corporation: revenues & profitability

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

Figure 14: International Business Machines Corporation: assets & liabilities

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

Microsoft Corporation

Table 11: Microsoft Corporation: key facts

Head office: One Microsoft Way, Redmond, Washington 98052 6399, USA

Telephone: 1 425 882 8080

Website: www.microsoft.com

Financial year-end: June

Ticker: MSFT

Stock exchange: NASDAQ

SOURCE: COMPANY WEBSITE M A R K E T L I N E

Microsoft Corporation (Microsoft or “the company”) is engaged in the development and marketing of software, services,

and hardware devices. The company’s products include operating systems for computing devices, servers, phones, and

other intelligent devices; server applications for distributed computing environments; productivity applications; business

solution applications; desktop and server management tools; software development tools; video games; and online

advertising. It also designs and sells hardware including personal computers (PCs), tablets, gaming and entertainment

consoles, phones, other intelligent devices, and related accessories. The company operates globally and has offices in

more than 100 countries.

The company operates its business through two business segments: Device and Consumer (D&C) and Commercial.

These segments are further classified into six segments.

Microsoft’s D&C business segment develops, manufactures, markets and supports products and services designed to

increase personal productivity, help people simplify tasks and make more informed decisions online, entertain and

connect people, and help advertisers connect with audiences. The D&C segment is made up of three operating

segments D&C Licensing, Computing and Gaming Hardware, Phone Hardware, and D&C Other.

The D&C Licensing segment’s principal products and services include Windows, including original equipment

manufacturer (OEM) licensing (Windows OEM), and other non-volume licensing and academic volume licensing of the

Windows operating system and related software; non-volume licensing of Microsoft Office, comprising the core Office

product set, for consumers (Office Consumer); Windows Phone operating system, including related patent licensing; and

certain other patent licensing. The products and services offered by Computing and Gaming Hardware segment include

Xbox gaming and entertainment consoles and accessories, second-party and third-party video game royalties, and Xbox

Live subscriptions (Xbox Platform); Surface devices and accessories; and Microsoft PC accessories. D&C Phone

Hardware segment is engaged in manufacturing and selling Lumia Smartphones and other non-Lumia phones.

The D&C Other segment is engaged in the resale of Windows Store, X-box transactions, and Windows Phone store;

advertising services, including search and display advertising; Office 365 Consumer, comprising Office 365 Home and

Office 365 Personal; and Studios that comprise of first-party video games; and retail stores. Windows Store and

Windows Phone Store are online application marketplaces that are designed to benefit the company’s developers and

partner ecosystems by providing access to a large customer base and benefit users by providing centralized access to

certified applications. Xbox Live transactions consist of online entertainment content, such as games, music, movies, and

TV shows, accessible on Xbox consoles and other devices. Search and display advertising includes Bing, Bing Ads,

MSN, Windows Services, and Xbox ads. Office 365 Consumer is designed to increase personal productivity through a

range of Microsoft Office programs and services delivered across multiple platforms via the cloud. Studios designs and

markets games for Xbox consoles, Windows-enabled devices, and online.

Global – Software & Services 0199 – 2139 – 2015

Microsoft’s Commercial segment develops, markets, and supports software and services designed to increase individual,

team, and organization productivity and efficiency, and to simplify everyday tasks through seamless operations across

the user’s hardware and software. It includes Commercial Licensing and Commercial Others segments.

The principal products offered by the Commercial Licensing segment include Windows Server, Microsoft SQL Server,

Visual Studio, System Center, and related Client Access Licenses (CAL); Windows Embedded; volume licensing of the

Windows operating system, excluding academic (Windows Commercial); Microsoft Office for business, including Office,

Exchange, SharePoint, Lync, and related CAL (Office Commercial); Skype; and Microsoft Dynamics business solutions,

excluding Dynamics CRM Online. The company’s server products are designed to make information technology (IT)

professionals and developers and their systems more productive. Server software is integrated server infrastructure and

middleware designed to support software applications built on the Windows Server operating system. This includes the

server platform, database, business intelligence, storage, management and operations, virtualization, service-oriented

architecture platform, security, and identity software. It also licenses standalone and software development lifecycle tools

for software architects, developers, testers, and project managers. CAL provides access rights to certain server and

Office products, including Windows Server, Microsoft SQL Server, Exchange, SharePoint, and Lync. Windows

Embedded is designed to extend the cloud to intelligent systems, including the Internet of Things (IoT), by delivering

specialized operating systems, tools, and services. Skype is designed to connect friends, family, clients, and colleagues

through a variety of devices. The company’s Microsoft Dynamics offers business solutions for financial management,

customer relationship management, supply chain management, and analytics applications for small and mid-size

businesses, large organizations, and divisions of global enterprises.

The Commercial Other segment offers enterprise services, including premier product support services and Microsoft

consulting services; commercial cloud, comprising Office 365 Commercial, other Microsoft Office online offerings,

Dynamics CRM Online, and Microsoft Azure. Enterprise services, including Premier product support services and

Microsoft Consulting Services are designed to assist customers in developing, deploying, and managing Microsoft server

and desktop solutions and provide training and certification to developers and IT professionals on various Microsoft

products. Office 365 Commercial is an online services offering that includes Microsoft Office, Exchange, SharePoint, and

Lync, and is available across a variety of devices and platforms. Dynamics CRM Online is designed to provide customer

relationship management (CRM) and supply chain management for small and mid-size businesses, large organizations,

and divisions of global enterprises. Microsoft Azure is an operating system with computing, storage, database, and

management, along with comprehensive cloud solutions, from which customers can build, deploy, and manage

enterprise workloads and web applications. These services also include a platform that helps developers build and

connect applications and services in the cloud.

Key Metrics

The company recorded revenues of $93,580 million in the fiscal year ending June 2015, an increase of 7.8% compared

to fiscal 2014. Its net income was $12,193 million in fiscal 2015, compared to a net income of $22,074 million in the

preceding year.

Global – Software & Services 0199 – 2139 – 2015

Table 12: Microsoft Corporation: key financials ($)

$ million 2011 2012 2013 2014 2015

Revenues 69,943.0 73,723.0 77,849.0 86,833.0 93,580.0

Net income (loss) 23,150.0 16,978.0 21,863.0 22,074.0 12,193.0

Total assets 108,704.0 121,271.0 142,431.0 172,384.0 176,223.0

Total liabilities 51,621.0 54,908.0 63,487.0 82,600.0 96,140.0

Employees 90,412 94,290 99,139 99,000 118,000

SOURCE: COMPANY FILINGS M A R K E T L I N E

Table 13: Microsoft Corporation: key financial ratios

Ratio 2011 2012 2013 2014 2015

Profit margin 33.1% 23.0% 28.1% 25.4% 13.0%

Revenue growth 11.9% 5.4% 5.6% 11.5% 7.8%

Asset growth 26.2% 11.6% 17.4% 21.0% 2.2%

Liabilities growth 29.3% 6.4% 15.6% 30.1% 16.4%

Debt/asset ratio 47.5% 45.3% 44.6% 47.9% 54.6%

Return on assets 23.8% 14.8% 16.6% 14.0% 7.0%

Revenue per employee $773,603 $781,875 $785,251 $877,101 $793,051

Profit per employee $256,050 $180,062 $220,529 $222,970 $103,331

SOURCE: COMPANY FILINGS M A R K E T L I N E

Figure 15: Microsoft Corporation: revenues & profitability

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

Figure 16: Microsoft Corporation: assets & liabilities

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

Oracle Corporation

Table 14: Oracle Corporation: key facts

Head office: 500 Oracle Parkway, Redwood Shores, California 94065, USA

Telephone: 1 650 506 7000

Website: www.oracle.com

Financial year-end: May

Ticker: ORCL

Stock exchange: NASDAQ

SOURCE: COMPANY WEBSITE M A R K E T L I N E

Oracle Corporation (Oracle or “the company”) is one of the leading providers of enterprise technology solutions. The

company offers software and computer hardware products and services, including database and middleware software,

application software, cloud infrastructure, hardware systems such as computer server, storage and networking products

and related services. It also offers a range of cloud computing technologies, including database and middleware software

as well as web-based applications, virtualization, clustering, large-scale systems management and related infrastructure.

The company operates in the Americas, Europe, Middle East and Africa, and Asia Pacific.

Oracle operates through three businesses: software and cloud; hardware systems; and services. These businesses are

further divided into six operating segments which include software license updates and product support, new software

licenses and cloud software subscriptions, services business, hardware systems products, hardware systems support,

and cloud infrastructure-as-a-service (IaaS).

The company’s software licenses updates and product support segment offers personalized support services, including

Oracle Lifetime Support and product enhancements and upgrades. Software license updates provide customers with

rights to software product upgrades and maintenance releases and patches released during the term of the support

period. Product support includes internet and telephone access to technical support personnel located in the company’s

global support centers, as well as internet access to technical content. Software license updates and product support

contracts are generally priced as a percentage of the net new software license fees. Oracle’s customers purchase

software license updates and product support contracts when they acquire new software licenses and renew their

software license updates and product support contracts annually.

Oracle’s new software licenses and cloud software subscriptions segment includes database, middleware and

applications software licenses, as well as cloud software-as-a-service (SaaS) and platform-as-a-service (PaaS). Oracle’s

software products are designed to operate on both single server and clustered server configurations for cloud or on-

premise information technology (IT) environments and to support a choice of operating systems including Oracle Solaris,

Oracle Linux, Microsoft Windows and third party UNIX products, among others.

Global – Software & Services 0199 – 2139 – 2015

The company’s database and middleware software includes a range of license and subscription based offerings that

provide a platform for running and managing business applications for midsize businesses, as well as large, global

enterprises. The company’s database software is designed to enable storage, retrieval and manipulation of all forms of

data, including transactional data, business information and analytics; semi-structured and unstructured data in the form

of weblogs, text, social media feeds, extensible markup language (XML) files, office documents, images, video and

spatial images; and other specialized forms of data, such as graph data. The company also offers Oracle Multitenant

software option in the areas of cloud computing and consolidation; Oracle Real Application Clusters, Oracle In-Memory

Database Cache, Oracle Advanced Compression and Oracle Partitioning software options in the areas of performance

and scalability; and Oracle Advanced Security, Oracle Database Vault, Oracle Audit Vault and Database Firewall

software options in the area of data security. Oracle also offers a portfolio of specialized database software products,

including MySQL; Oracle TimesTen In-Memory Database; Oracle Berkeley DB, a family of open source, embeddable,

relational, XML and key-value (NoSQL) databases; and Oracle NoSQL Database, a distributed key-value database.

The company’s Oracle Fusion Middleware software offers a range of integrated application infrastructure software

products via license and subscription based arrangements. This software is designed to enable customers to integrate

Oracle and non-Oracle business applications, automate business processes, scale applications, simplify security and

compliance, manage lifecycles of documents and get targeted business intelligence on their existing IT systems. It is

offered as various software products and suites, including Oracle WebLogic Server and Oracle Cloud Application

Foundation; Oracle SOA Suite of software products; Oracle Data Integration software products; Oracle Business

Process Management Suite software products; Oracle WebCenter software products; Oracle Business Intelligence Suite;

Oracle Identity Management software; and Development Tools for application development, database development and

business intelligence.

Oracle’s management software include Oracle Enterprise Manager which provides an integrated enterprise IT

management and cloud management family of products. Oracle Enterprise Manager is designed to provide a complete

IT lifecycle management approach, including configuring elements of an IT environment, monitoring service levels,

diagnosing and troubleshooting problems, patching and provisioning IT environments, managing compliance reporting

and providing change management across physical and virtualized IT environments.

The company’s application software is designed to manage and automate core business functions across the enterprise,

as well as to enable them to differentiate and innovate in those processes. Oracle offers industry-specific solutions for

customers in a number of different industries including communications, engineering and construction, financial services,

healthcare, manufacturing, public sector, retail and utilities, among others. In addition, the company offers a suite of

modular, next-generation cloud software applications spanning core business functions, including sales, marketing,

social, service, supply chain management, human capital, talent management, enterprise resource planning, enterprise

planning, and financial reporting, among others. The company’s suite of human capital management application software

delivers core human resource transactions, workforce service delivery and complete enterprise talent management via

its Oracle Cloud SaaS offerings and on-premise solutions.

Oracle offers customer experience and customer relationship management (CRM) solutions for delivering core human

resource transactions, workforce service delivery and complete enterprise talent management via its Oracle Cloud SaaS

offerings and on-premise solutions. It offers integrated financial management software solutions for finance operations,

risk management and advanced financial controls. The company’s procurement software suites are designed to provide

packaged integration to back-office applications and support source-to-settle process. In addition, the company offers

project portfolio management application software for project-intensive industries such as oil and gas, utilities,

engineering and construction, aerospace and defense and public sector. The company offers a portfolio of supply chain

management software application offerings, including value chain planning, value chain execution, product lifecycle

management (PLM), asset lifecycle management (ALM), order orchestration and fulfillment and manufacturing solutions.

Global – Software & Services 0199 – 2139 – 2015

Oracle also offers business analytics software solutions that include enterprise performance management and analytic

applications, which work with both Oracle and non-Oracle transactional systems and supports strategic planning and

goal setting, financial and operational planning, financial close and reporting and profitability management. In addition,

the company offers packaged business intelligence applications that support business functions and industry-specific

processes. The company offers industry-specific applications across various industries, including communications,

consumer goods, education, energy, engineering and construction, financial services, healthcare, life sciences,

manufacturing, professional services, public sector, retail, travel, transportation and utilities.

The company’s services business segment offers consulting services, advanced customer support services, and

education services. Consulting services offered by Oracle include business and IT strategy alignment, enterprise

architecture planning and design, initial product implementation and integration, and ongoing product enhancements and

upgrades. Education services include training and certification programs offered to customers, partners and employees

regarding the adoption and use of its software and hardware products.

Oracle’s hardware systems products segment provide a selection of hardware systems and related services, including

servers, storage, networking, virtualization software, operating systems, and management software to support diverse IT

environments, including cloud computing environments. The company offers a range of server systems using its SPARC

microprocessor, which run the Oracle Solaris OS. SPARC servers are also a core component of the Oracle

SuperCluster, one of the company’s Oracle Engineered Systems. The company’s storage products manage, protect,

archive and restore customers’ mission critical data assets and consist of tape, disk, flash and hardware-related software

including file systems software, back-up and archive software and storage management software and networking for

mainframe and open systems environments. Oracle’s tape storage product line includes Oracle StorageTek libraries,

drives, virtualization systems, media and associated software packages that provide data lifecycle management, deep

analytics, and file access. The company’s networking and data center fabric products include Oracle Virtual Networking,

and Oracle InfiniBand and Ethernet technologies. The company also offers hardware and software networking products

for the communications industry. Its communications networks solutions for service providers include signaling, policy,

and subscriber data management solutions. The OS offered by the company includes Oracle Solaris and Oracle Linux.

The company’s portfolio of virtualization solutions range from the desktop to data center, including Oracle VM, a server

virtualization software. In addition, Oracle develops a range of other hardware-related software, including development

tools, compilers, management tools for servers and storage, diagnostic tools and file systems.

The company’s hardware systems support segment provides software updates for software components that are

essential to the functionality of its server and storage products, such as Oracle Solaris. The segment also offers product

repairs, maintenance services and technical support services.

Oracle’s cloud IaaS segment provides deployment and management offerings for its software and hardware and related

IT infrastructure, including virtual machine instance services, hardware and related support services offerings and

software and hardware management and maintenance services.

Key Metrics

The company recorded revenues of $38,226 million in the fiscal year ending May 2015, a decrease of .1% compared to

fiscal 2014. Its net income was $9,938 million in fiscal 2015, compared to a net income of $10,955 million in the

preceding year.

Global – Software & Services 0199 – 2139 – 2015

Table 15: Oracle Corporation: key financials ($)

$ million 2011 2012 2013 2014 2015

Revenues 35,622.0 37,121.0 37,180.0 38,275.0 38,226.0

Net income (loss) 8,547.0 9,981.0 10,925.0 10,955.0 9,938.0

Total assets 73,535.0 78,327.0 81,812.0 90,266.0 110,903.0

Total liabilities 33,290.0 34,240.0 36,667.0 42,819.0 61,805.0

Employees 108,000 115,000 120,000 122,000 132,000

SOURCE: COMPANY FILINGS M A R K E T L I N E

Table 16: Oracle Corporation: key financial ratios

Ratio 2011 2012 2013 2014 2015

Profit margin 24.0% 26.9% 29.4% 28.6% 26.0%

Revenue growth 32.8% 4.2% 0.2% 2.9% (0.1%)

Asset growth 19.4% 6.5% 4.4% 10.3% 22.9%

Liabilities growth 9.6% 2.9% 7.1% 16.8% 44.3%

Debt/asset ratio 45.3% 43.7% 44.8% 47.4% 55.7%

Return on assets 12.7% 13.1% 13.6% 12.7% 9.9%

Revenue per employee $329,833 $322,791 $309,833 $313,730 $289,591

Profit per employee $79,139 $86,791 $91,042 $89,795 $75,288

SOURCE: COMPANY FILINGS M A R K E T L I N E

Figure 17: Oracle Corporation: revenues & profitability

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

Figure 18: Oracle Corporation: assets & liabilities

SOURCE: COMPANY FILINGS M A R K E T L I N E

Global – Software & Services 0199 – 2139 – 2015

METHODOLOGY

MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-

checked and presented in a consistent and accessible style.

Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by

analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases

provide the foundation for all related industry profiles

Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company

profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market

overview

Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of each

definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the

market and our clients

Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and

trends

MarketLine aggregates and analyzes a number of secondary information sources, including:

– National/Governmental statistics

– International data (official international sources)

– National and International trade associations

– Broker and analyst reports

– Company Annual Reports

– Business information libraries and databases

Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data to

be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can

then be refined according to specific competitive, regulatory and demand-related factors

Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

Global – Software & Services 0199 – 2139 – 2015

Industry associations

World Information Technology and Services Alliance (WITSA)

8300 Boone Boulevard, Suite 450, Vienna, VA, 22182, USA

Tel.: 1 571 265 5964

Fax: 1 703 893 1269

www.witsa.org

European Information Technology Observatory (EITO)
Hahnstraße 70, 60528 Frankfurt, Germany

Tel.: 49 69 242416 0

Fax: 49 69 242416 16

www.eito.com

Software & Information Industry Association
1090 Vermont Ave NW Sixth Floor, Washington DC 20005-4095

Tel.: 1 202 289 7442

Fax: 1 202 289 7097

www.siia.net

Related MarketLine research

Industry Profile

Software & Services in Europe

Software & Services in the United States

Software & Services in Asia-Pacific

Software & Services in China

Software & Services in Germany

Global – Software & Services 0199 – 2139 – 2015

APPENDIX

About MarketLine
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COMPANY PROFILE

Microsoft Corporation

REFERENCE CODE: 8ABE78BB-0732-4ACA-A41D-3012EBB1334D
PUBLICATION DATE: 25 Jul 2017
www.marketline.com
COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED

A Progressive Digital Media business

http://www.marketlineinfo.com/

Microsoft Corporation

TABLE OF CONTENTS

Microsoft Corporation
© MarketLine

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TABLE OF CONTENTS

Company Overview ………………………………………………………………………………………….. 3
Key Facts …………………………………………………………………………………………………………. 3
Business Description ………………………………………………………………………………………..4
History …………………………………………………………………………………………………………….. 5
Key Employees ………………………………………………………………………………………………. 26
Key Employee Biographies ……………………………………………………………………………..28
Major Products & Services ………………………………………………………………………………35
SWOT Analysis ………………………………………………………………………………………………. 36
Top Competitors …………………………………………………………………………………………….. 44
Company View ……………………………………………………………………………………………….. 45
Locations And Subsidiaries …………………………………………………………………………….51

Microsoft Corporation

Company Overview

Microsoft Corporation
© MarketLine

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Company Overview

COMPANY OVERVIEW

Microsoft Corporation (Microsoft or “the company”) develops, licenses, and supports a range of software
products and services. The company offers products, including operating systems; cross-device
productivity applications; server applications; business solution applications; desktop and server
management tools; software development tools; video games; and training and certification of computer
system integrators and developers. The company operates globally and has offices in more than 190
countries. It is headquartered in Redmond, Washington.

The company reported revenues of (US Dollars) US$85,320 million for the fiscal year ended June 2016
(FY2016), a decrease of 8.8% over FY2015. In FY2016, the company’s operating margin was 23.3%,
compared to an operating margin of 19.2% in FY2015. In FY2016, the company recorded a net margin of
19.7%, compared to a net margin of 13% in FY2015.

The company reported revenues of US$22,090 million for the third quarter ended March 2017, a
decrease of 8.3% over the previous quarter.

Key Facts

KEY FACTS

Head Office Microsoft Corporation
1 Microsoft Way
REDMOND
Washington
REDMOND
Washington
USA

Phone 1 425 8828080
Fax 1 425 7067329
Web Address www.microsoft.comen-us
Revenue / turnover (USD Mn) 85,320.0
Financial Year End June
Employees 114,000
NASDAQ Ticker MSFT

Microsoft Corporation

Business Description

Microsoft Corporation
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Business Description

BUSINESS DESCRIPTION

Microsoft Corporation (Microsoft or “the company”) is engaged in the development and marketing of
software, services, and hardware devices. The company designs and sells hardware including personal
computers (PCs), tablets, gaming and entertainment consoles, phones, other intelligent devices, and
related accessories. In addition, Microsoft offers cloud-based solutions that provide customers with
software, services, platforms, and content; and consulting and product and solution support services. The
company operates globally and has offices in more than 190 countries.

The company operates its business through three business segments: More Personal Computing,
Productivity and Business Processes, and Intelligent Cloud.

More Personal Computing segment consists of products and services for end users, developers, and IT
professionals. The segment primarily comprises Windows, including Windows original equipment
manufacturer (OEM) licensing and other non-volume licensing of the Windows operating system, volume
licensing of the Windows operating system, patent licensing, Windows Embedded, MSN display
advertising, and Windows Phone licensing; Devices, including Microsoft Surface, phones, and PC
accessories; Gaming, including Xbox hardware; Xbox Live, comprising transactions, subscriptions, and
advertising; video games; and third-party video game royalties; and Search advertising. In FY2016, the
More Personal Computing segment reported revenues of $40,460 million, which accounted for 44% of the
company’s total revenue.

Microsoft’s Productivity and Business Processes segment consists of products and services in its portfolio
of productivity, communication, and information services, spanning various devices and platforms. This
segment primarily comprises Office Commercial, including volume licensing and subscriptions to Office
365 commercial for products and services such as Office, Exchange, SharePoint, and Skype for
Business, and related Client Access Licenses (CALs); Office Consumer, including Office sold through
retail or through an Office 365 consumer subscription, and Office Consumer Services, including Skype,
Outlook.com, and OneDrive; and Dynamics business solutions, including Dynamics ERP products,
Dynamics CRM on-premises, and Dynamics CRM Online. In FY2016, the Productivity and Business
Processes segment reported revenues of $26,487 million, which accounted for 28.8% of the company’s
total revenue.

The company’s Intelligent Cloud segment offers public, private, and hybrid server products and cloud
services for businesses. This segment primarily comprises Server products and cloud services, including
SQL Server, Windows Server, Visual Studio, System Center, and related CALs, as well as Azure; and
Enterprise Services, including premier support services and Microsoft consulting services. In FY2016, the
Intelligent Cloud segment reported revenues of $25,042 million, which accounted for 27.2% of the
company’s total revenue.

Geographically, the company classifies its operations into two segments, namely the US and other
countries. In FY2016, the US segment accounted for 47.6% of the company’s total revenues, followed by
other countries with 52.4%.

Microsoft Corporation

History

Microsoft Corporation
© MarketLine

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History

HISTORY

In July, the company and Esri partnered to advance conservation through Enhanced Land Cover
Mapping Technology.

Dun & Bradstreet, a provider of commercial data, analytics and insights for business, teamed up with
Microsoft to give companies worldwide direct access to its data through Microsoft’s cloud services.

The company and BMW partnered to provide Skype for Business to 5 Series cars.

The company partnered with EY on a new analytics solution to help organizations enhance workforce
productivity and well-being.

The company and Vivli partnered with BlueMetal on a New Global Clinical Trial Data Platform to advance
scientific discoveries for Human Health.

The company launched an iPhone app which can narrate the world for blind people.

The company launched new email marketing and invoicing tools for small businesses.

Xplore Technologies partnered with Microsoft Azure Certified for Internet of Things.

Colt collaborates the company’s Azure to On Demand Platform.

The company partnered with Excellon Software to launch exact GSP solution.

The company launched Surface Laptop to expand the Surface lineup.

The company introduced its Dictate AI-Enabled Add-on for Office.

The company and Absolute, the self-healing endpoint security company, collaborated for Microsoft Azure
Information Protection to enhance data protection.

The company partnered with 20 BankChain for the Microsoft Azure as exclusive Cloud partner.

Microsoft entered into an agreement to acquire Cloudyn, a software company.

The company signed an agreement to acquire Hexadite, a provider of technology to automate responses
to cyber attacks.

Microsoft entered into a strategic alliance with NetApp for accelerating digital transformation in hybrid
cloud.

Microsoft entered into a partnership with Adveo to utilize Microsoft’s cloud computing platform, Microsoft
Azure to transform the office supplies business for workspace solutions.

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History

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The company and Rhipe collaborated with the vendor as a globally managed licensing partner.

The company introduced a new Mixer Create live streaming app on iOS and Android.

Microsoft India entered into an agreement with Telecom Sector Skill Council, to develop skill through
Project Sangam.

Mid-Atlantic Broadband Communities and Microsoft introduced a network to provide broadband internet
access at home for students in Southern Virginia.

The company planned to introduce a new Surface Pro device.

VOSS Solutions, a Microsoft certified partner, introduced five new solutions for Microsoft UC.

The company planned to establish Azure data centres in South Africa.

Microsoft entered into partnership with United Nations for developing technology to better predict, analyze
and respond for critical human rights situations.

Microsoft India entered into partnership with UNO Minda for developing connected vehicle technologies.

The company introduced IoT Central today, a new IoT service for enterprises.

In March, the company’s Power BI team honored with New Technology Integration Award at 2017 Esri
Partner Conference.

In February, the company introduced Xbox Game Pass, a subscription service with 100 Xbox One and
Xbox 360 games.

In February, the company planned to introduce Skype with Aadhaar authentication for allowing access to
bank accounts with webcam.

In February, the company introduced its Azure cloud platform at Seoul and Busan data centers in South
Korea.

In February, the company planned to expand into healthcare industry with artificial intelligence and cloud
services.

In February, Microsoft Italy introduced its new headquarters Microsoft House at Porta Volta, Milan, Italy.

In February, the company planned for moving its Michigan Microsoft Technology Center to downtown
Detroit, Michigan, the US.

In May, the company acquired Israeli cyber security startup, Hexadite.

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History
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In February, Microsoft entered into an agreement with Liquid Telecom, to provide business-in-a-box
services across Africa.

In February, the company initiated a facility to fight against cyber crime in Latin America with new
Cybersecurity center in Mexico.

In April, the company announced to introduce a new surface Laptop ahead of Surface Pro 5, which
competes with Google’s Chromebook.

In June, the company planned to introduce new data control privacy dashboard.

In June, the company planned to release Xbox One S, a slimmest gaming console at E3 Expo.

In May, the company introduced Microsoft Surface Pro 5 with Intel Kaby Lake processors.

In February, Microsoft entered into an agreement with Flipkart, to provide online shopping service in
India.

In March, Microsoft entered into partnership with Publicis Groupe for creating a new class of AI
capabilities to help clients for succeeding in market transformations.

In May, Vonage entered into an agreement with Microsoft, to introduce a connector to Microsoft workflow
automation suite.

In May, Microsoft and Samsung planned to introduce call capable smart speaker.

In May, Batelco joined Microsoft for introducing Microsoft Surface devices.

In May, Downer entered into partnership with Microsoft for developing cloud based services.

In May, Mobily entered into an agreement with Microsoft Arabia to provide cloud services and productivity
tools for Small Medium Enterprises in Saudi Arabia.

In May, the company planned to introduce Dubai font.

In February, the company plans to launch HoloLens v3, the consumer-ready version of HoloLensmixed
reality headset from Microsoft.

In May, the company and the Office of the UN High Commissioner for Human Rights entered into a five-
year partnership for works of the UN Human Rights Office for a grant of US$5 million from Microsoft.

the company entered into a partnership with Yokogawa Electric Corporation, FogHorn Systems, Inc.,
Bayshore Networks, Inc., and Telit IoT Platforms, LLC, to integrate industrial IoT

architecture.

In February, the company entered into a partnership with Yokogawa Electric Corporation, FogHorn
Systems, Inc., Bayshore Networks, Inc., and Telit IoT Platforms, LLC, to integrate industrial IoT

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History
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architecture.

Microsoft and Flipkart entered into a strategic partnership, whereby Flipkart will incorporate Microsoft
Azure as its public cloud platform. Also, the company entered into a patent licensing agreement with
Toyota that includes extended coverage for connected car technologies. Subsequently, Microsoft
Technology Licensing and Casio Computer entered into a patent licensing agreement that includes
coverage for smartwatch technologies.

The company acquired Maluuba, a Canadian deep learning startup.

In June, the company’s OneDrive partnered with Agolo to incorporate enterprise cloud documents in its
real-time summarization platform.

In September, Univa, an innovator of workload management products, joined Microsoft Enterprise Partner
Cloud Alliance to reinforces Univa’s commitment to providing best-in-class solutions built on the Microsoft
cloud stack.

In September, the company and Docker signed commercial partnership to provide enterprises to
modernize their application environments and create hybrid Windows applications.

In October, the company introduced HoloLens in six new countries for expansion of its mixed reality
headset business.

In October, the company planned to introduce new Messenger app.

In November, the company introduced a new Insider Preview build of Office Mobile for Windows 10.

In October, Microsoft announced to launch its own version of Slack.

In December, Microsoft India, L V Prasad Eye Institute, and global experts announced to launch Microsoft
Intelligent Network for Eyecare (MINE).

In October, the company invested US$3 billion in cloud and European data centres.

In September, the company introduced new Office 365 App Launcher UI.

In September, the company planned to introduce service fabric on Linux.

In August, the company planned to introduce its Surface Phone at IFA 2016.

In August, the company planned to open two more retail stores in the US.

In July, the company planned to introduce box One S 500GB, 1TB bundles.

In July, the company planned to introduce new Microsoft Authenticator applications.

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History
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In July, the company planned to introduce Xbox One S 2 TB.

In July, the company planned to introduce new Surface hardware.

In July, the company planned to release Band 3.

In June, Microsoft entered into partnership with DepEd for launching EGG.

In July, the company planned to release Surface All-in-One PC.

In June, the company planned to introduce Azure Information Protection Service.

In June, the company planned to open its newest specialty store in Brea, California.

In June, the company planned to introduce payment system for Windows 10 smartphones.

In June, the company released new Office 365 admin app for Windows phone and Android.

In June, the company planned to introduce Cortana on iOS and Android.

In June, the company opened Cyber Security Engagement Centre in India.

In May, the company planned to introduce VR Capable Xbox in next year.

In May, Microsoft planned to open Innovation Center in Bosnia.

In May, the company planned to introduce Minecraft in China.

In May, iBall partnered with Microsoft and Intel to introduce iBall CompBook laptop.

In May, the company planned to introduce smartphone with pre-touch technology.

In May, the company planned to release Surface Book 2 with a 4K display.

In March, the company planned to release Windows 10 Mobile 10586.318.

In May, the company planned to introduce Xbox One Slim at 2016 E3 conference.

In April, the company planned for expansion of its cloud computing business in China.

In April, the company planned to release three models of its Surface phone in next year.

In March, the company planned to introduce a Universal Skype app in Windows 10.

In March, the company planned to introduce new Office 365 for Nonprofits.

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History
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In March, Microsoft Nigeria opened its new office in Lagos, Nigeria.

In March, the company planned to release Lumia 650 in the US.

In March, the company planned to introduce Windows 10 Mobile.

In March, the company opened a new office and experience center at Cyberport.

In March, the company planned to introduce universal Xbox apps.

In May, Airtel entered into partnership with Microsoft, to introduce a new cloud platform Connexion.

In May, Microsoft entered into partnership with SAP for providing product integrated cloud solutions.

in December, Microsoft entered into an agreement with Qualcomm, to introduce full 32 bit Win32
compatibility to ARM devices run on Windows 10.

In March, the company introduced new Office 365 admin center.

In March, the company released Windows 10 Mobile 10586.164.

In February, the company planned to establish a Cybercrime Center in Seoul, South Korea.

In February, Microsoft and HTC planned to introduce new Windows 10 mobile handsets.

In February, the company set to introduce TV OS.

In February, HCL Technologies entered into an agreement with Microsoft, to introduce an incubation
centre for IoT in Redmond, Washington, the US.

In January, the company planned to introduce new Minecraft Edition for schools.

In January, the company planned to introduce its own SIM card for windows.

In February, the company released Lumia 650 smartphone.

In January, the company released Lumia 850 smartphone.

In January, Volvo entered into partnership with Microsoft, to introduce wearable voice control technology.

Microsoft Technology Licensing and Olio Devices signed a patent licensing agreement covering wearable
devices.

Microsoft and Acer expanded their global partnership to bring Microsoft mobile productivity services to
more consumers.

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History
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Microsoft entered into a definitive agreement to acquire SwiftKey, a software keyboard that powers
Android and iOS devices. This acquisition aligns with the company’s commitment to offer its products and
services on all platforms. Subsequently, Microsoft signed a definitive agreement to acquire Xamarin, a
platform provider for mobile app development. This acquisition is expected to enable developers to build
apps on any device and enhance mobile app development.

Nissan Motor selected Microsoft Azure to power Nissan telematics system. Subsequently, Microsoft
Technology Licensing entered into a collaborative patent licensing agreement with GoPro for certain file
storage and other system technologies.

Microsoft and Acer expanded their global partnership to offer Microsoft mobile productivity services to
more consumers.

The company and Wistron entered into a renewed Android patent licensing agreement covering Wistron’s
tablets, mobile phones, e-readers, and other consumer devices running Android and Chrome platforms
under Microsoft’s patent portfolio. This agreement extends a prior Android intellectual property (IP)
license between the companies. Also, Microsoft Technology Licensing and Rakuten signed a worldwide
patent cross-licensing agreement covering each company’s respective consumer electronics products,
including Linux and Android-based devices. This agreement enables the company and Rakuten to offer
new products to its consumers.

Microsoft entered into a strategic partnership with R3 Consortium to accelerate the use of distributed
ledger technologies, also known as blockchain, among R3 member banks and global financial markets.
Though this partnership, Microsoft will provide cloud-based tools, services and infrastructure for R3 lab
locations around the world, as well as dedicated technical architects, project managers, lab assistants
and support services. Microsoft Technology Licensing and Visuality Systems expanded their Server
Message Block (SMB) collaboration from the embedded world to the enterprise market. This partnership
offers enhanced business solutions to more products worldwide. Subsequently, Microsoft and Rolls-
Royce collaborated to bring new capabilities to Rolls-Royce customers. Rolls-Royce will integrate
Microsoft Azure IoT Suite and Cortana Intelligence Suite into its service solutions to expand its digital
capabilities to support the current and next generation of Rolls-Royce intelligent engines. Further,
Microsoft and Jabil collaborated to create quality assurance platform for predictive analytics. The
company and Funai Electric extended their partnership with the renewal of a patent cross-licensing
agreement covering various consumer audio-video products.

ELECOM and Microsoft entered into a patent collaboration to provide a range of business solutions for
customers including network attached storage and tablets. Also, the company entered into a partnership
with SAP to deliver broad support for the SAP HANA platform deployed on Microsoft Azure, to simplify
work through new integrations between Microsoft Office 365 and cloud solutions from SAP, and to
provide enhanced management and security for custom SAP Fiori apps. Subsequently, Microsoft reached
an agreement to sell the company’s entry-level feature phone assets to FIH Mobile, a subsidiary of Hon
Hai/Foxconn Technology, and HMD Global. As part of the deal, FIH Mobile will also acquire Microsoft
Mobile Vietnam, the company’s Hanoi, Vietnam’s manufacturing facility and substantially all of its feature
phone assets, including brands, software and services, care network and other assets, customer
contracts, and critical supply agreements. The company and Xiaomi entered into an agreement to expand
their global partnership to provide innovative user experiences on mobile devices. As part of the

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History
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agreement, Xiaomi will ship Microsoft Office and Skype on Xiaomi Android smartphones and tablets.
Furthermore, Microsoft and LinkedIn entered into a definitive agreement under which Microsoft agreed to
acquire LinkedIn for approximately $26.2 billion, inclusive of LinkedIn’s net cash. Also, the company and
International Society for Technology in Education (ISTE) collaborated to provide school planning and
professional learning resources. Subsequently, Microsoft Technology Licensing collaborated with
Jearwon Microelectronics to expand cloud-based business solutions for enterprise customers around the
world. This collaboration includes the delivery of patent license rights. Luna Mobile and the company
entered into patent partnership to expand smartphone and tablet technology for customers around the
world.

GE partnered with Microsoft to bring its Predix platform for the Industrial Internet available on the
Microsoft Azure cloud for industrial businesses. Also, Microsoft Technology Licensing and Ryussi
Technologies announced a new partnership in business and technology solutions covering Microsoft’s
File Access Server Protocols for the enterprise data storage market. Subsequently, the Renault-Nissan
Alliance and Microsoft signed a global, multiyear agreement to partner on next-generation technologies to
advance connected driving experiences worldwide. Further, Microsoft and Adobe entered into a strategic
partnership to help enterprise companies embrace digital transformation. Also, Microsoft and Workday
announced a global strategic partnership that will expand the business solutions joint customers can use
to continually optimize the way work gets done. Subsequently, Microsoft partnered with Bank of America
Merrill Lynch to transform trade finance transacting with Azure Blockchain as a Service.

In December, the company set to introduce Xbox slim to take on Apple in battle for living room.

In December, the company planned to introduce Surface Pro 4 tablets in India.

In November, the company planned to introduce Lumia 1050 set.

In November, the company relocated its Tennessee branch to Nashville.

In November, the company introduced Lumia 950, 950 XL in India.

In November, Microsoft and Google provided free Skype and Hangout calls in France for few days.

In November, Microsoft entered into partnership with ConsenSys, to introduce blockchain platform.

In November, the company planned to provide Azure and Office 365 Cloud Services from the UK.

In November, the company planned to open its two new data centers in Germany.

In November, the company planned to introduce its Windows 10 mobile device, Lumia 950.

In November, the company planned to open its data centres for cloud computing business in the UK.

In November, Druva entered into partnership with Microsoft for expansion of Cloud Footprint and
Flexibility.

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In November, the company planned to introduce Surface Phone As Ultimate Productivity Phone.

In November, the company planned to introduce Windows 10 Threshold 2.

In November, the company plan to introduce its first Lumia phones powered by Snapdragon 820.

In October, Dell partnered with Microsoft to provide hybrid cloud solutions.

In April, the company introduced collaborative, new Office software suite.

In August, the company planned to introduce Xbox One DVR.

In July, the company planned to introduce Lumia 640 XL LTE In India.

In September, the company introduced Windows phones Lumia 950, 950 XL with iris scanner.

In July, the company introduced Arrow Launcher Beta for its fans.

In July, the company planned to introduce Windows 10, a new version of its operating system.

In July, the company planned to introduce Surface Pro 4 with Windows 10.

In July, the company planned to provide free Azure cloud services to start ups in India.

In July, the company released Cortana Analytics Suite, a new package of data storage, information
managing, machine learning, and business intelligence software in a monthly subscription.

In July, the company planned to introduce its surface devices in India.

In July, the company released a new office 365 enterprise suite.

In July, the company introduced next generation of office software suite for Apple MacBook and iMac
users.

In June, Microsoft, Google, Mozilla and others partnered to introduce WebAssembly, a new binary format
for web.

In June, the company introduced power banks with capabilities of 5,200mAh, 9,000mAh and 12,000mAh.

In May, the company released Microsoft Lumia 540 Dual SIM mobile.

In June, Microsoft entered into an agreement with Snapdeal, to introduce branded online store.

In April, the company planned to introduce more 4G phones in India.

In April, the company planned to open its retail store at Easton, Pennsylvania, the US.

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In April, the company planned to open its store in University Town Center Mall.

The company launched new solutions spanning containers, security, infrastructure and IoT on Microsoft
Azure cloud platform.

Microsoft launched a new Surface, the Surface 3, a 4G LTE ready version, optimized to run full Windows
and Office.

The company launched new Surface, Lumia and Microsoft Band devices and enhanced its Windows 10
product lineup. Also, ABB and Microsoft launched new electric vehicle (EV) fast-charging services
platform, combining ABB’s EV charging stations with Microsoft’s Azure cloud-based services. Dell and
Microsoft launched a new cloud solution, including Microsoft Azure-consistent, an integrated system for
hybrid cloud and extended program offerings. TASER International and Microsoft entered into a
partnership to combine capabilities of the Microsoft Azure cloud platform and Windows 10 devices with
TASER’s Axon Platform and Evidence.com solution.

Microsoft launched Windows 10, a new generation of Windows.

Samsung and Microsoft extended their partnership to pre-install Microsoft services and apps on
Samsung’s portfolio of Android devices and will deliver secured mobile productivity for businesses
through a new Microsoft Office 365 and Samsung KNOX Business Pack.

Kyocera and Microsoft expanded their patent licensing agreement that enables the companies to use a
range of each other’s technologies in their respective products through a patent cross license. Also, the
company announced to restructure its phone hardware business and transfer its imagery acquisition
operations to Uber and strategically shift its display advertising business that would enable it to focus on
investing in search as its core advertising technology and service.

The company entered into a partnership with China Electronics Technology Group (CETC) to provide
operating system technology and services for Chinese users in specialized fields in government
institutions and critical infrastructure state-owned enterprises.

Microsoft and General Electric signed an agreement to deliver Microsoft’s cloud productivity suite Office
365 for employee collaboration and productivity.

The company partnered with Ford Motor to form Ford Service Delivery Network and expand its connected
services. Microsoft also partnered with InsideSales.com, a leading cloud-based sales acceleration
technology company, to offer complete sales acceleration platform, which includes PowerDialer,
PowerStandings, NeuralView and Vision, to customers using the Microsoft Dynamics CRM platform.
Microsoft and FieldOne Systems signed an agreement to include FieldOne Sky field service management
solution into the Microsoft Dynamics global independent software vendor program. Subsequently, the
company agreed to acquire IP from Fusion Software which will add voice of the customer capabilities to
Microsoft Dynamics CRM.

Melco Group and Microsoft entered into a patent agreement providing Melco Holdings coverage for its

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Linux and Android-based devices under Microsoft’s patent portfolio.

Adobe and Microsoft entered into a collaboration to integrate Adobe’s Marketing Cloud Solutions with
Microsoft Dynamics CRM solution and enhance customer engagement.

The company acquired Adxstudio, a web portal and application lifecycle management solutions provider.
This acquisition is expected to enhance the company’s Microsoft Dynamics CRM offerings.

The company acquired Equivio, a provider of machine learning technologies for eDiscovery and
information governance. This acquisition is expected to enhance the company’s Office 365 offerings,
which include eDiscovery and information governance capabilities.

TGI Fridays partnered with Microsoft to process orders and payments using Fridays Service Style
technology powered by Windows 8.1. Subsequently, Microsoft Open Technologies, a subsidiary of
Microsoft partnered with Moodle partner Remote-Learner.net and integrated Moodle and Microsoft Office
365 to transform education technology.

Deutsche Telekom and Microsoft extended their partnership to expand and market Microsoft Lumia
smartphones and online services such as Office 365 and OneDrive across sales and marketing channels
in all 12 European countries where Deutsche Telekom operates.

Polycom and Microsoft extended their partnership through which Polycom will deliver a new series of
video collaboration solutions purpose-built for Skype for Business called Polycom RoundTable.
Subsequently, Fuji Xerox and Microsoft Technology Licensing signed a cross-licensing agreement that
covers a broad range of products and services offered by Microsoft and Fuji Xerox, including digital
imaging, document management and mobile consumer products.

Fujitsu and Microsoft collaborated to transform manufacturing processes through Fujitsu devices powered
by Windows 8.1 Pro, the IoT services of FUJITSU Cloud A5 for Microsoft Azure, and the Fujitsu IoT/M2M
platform. Subsequently, Miele & Cie, a manufacturer of high-end domestic appliances and commercial
equipment, and Microsoft collaborated to create next generation of smart appliances and home cooking.

Microsoft announced a range of new products and services, including the next generation of Windows
management, Microsoft Office, hybrid cloud infrastructure and SQL Server. Also, Microsoft announced
that Windows 10 will be available on July 29 in 190 countries. Subsequently, Microsoft launched the new
Nokia 105 and Nokia 105 Dual SIM. The mobiles are aimed at first-time mobile phone buyers, as well as
people looking for a reliable backup device for their smartphone.

Subsequently, Microsoft launched Microsoft Surface Hub, the company’s new large-screen collaboration
device, expected to be available for businesses to order in 24 markets.

Microsoft and Dell expanded their partnership to deliver premium Windows 10 devices and services and
support to enterprise customers. Also, Microsoft and Salesforce expanded their strategic partnership to
connect the Salesforce Customer Success Platform to Microsoft Office productivity apps and services.

The company and ASUSTeK Computer expanded their patent licensing agreement that includes cross-

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license covering.

The company and Red Hat entered into a partnership under which Red Hat Enterprise Linux would be
offered as the preferred choice for enterprise Linux workloads on Microsoft Azure. Also, Microsoft
Technology Licensing and Star Micronics signed a worldwide patent licensing agreement that provides
coverage under Microsoft’s patent portfolio for Star Micronics’ Android-based commercial printers and
computing devices. Subsequently, the company announced plans to offer cloud services from the UK.
Further, Hewlett Packard Enterprise (HPE) and Microsoft strengthened their collaboration on Windows 10
offerings, and launched cloud productivity and mobility solution offerings.

HPE and the company announced plans to deliver integrated hybrid IT infrastructure. The extended
partnership appoints Microsoft Azure as a preferred public cloud partner for HPE customers while HPE
will serve as a preferred partner in providing infrastructure and services for Microsoft’s hybrid cloud
offerings. Subsequently, Microsoft acquired Metanautix, an analytics start-up which is expected to
enhance the company’s presence in the analytics market.

In September, the company planned to establish a new data center in South Korea.

The company announced restructuring plan to simplify its organization and align the recently acquired
Nokia Devices and Services business with the company’s overall strategy. Microsoft and Akamai
Technologies partnered with venture capital (VC) firm Jerusalem Venture Partners (JVP) to develop
accelerator in the field of cybersecurity.

Microsoft announced its plans to open its first US-based Microsoft Innovation Center (MIC) in Miami,
Florida.

The company and Voxx Electronics entered into a worldwide patent licensing agreement that provides
Voxx Electronics with broad coverage under Microsoft’s patent portfolio for devices running the Android
OS, including rear-seat entertainment devices, tablets and other consumer devices.

Microsoft announced new services, products and partnerships that remove the barriers to cloud adoption
for IT professionals, developers and technology users. These include private connections to cloud; cloud
storage solutions; enterprise-grade performance and networking and Azure API management. The
company also enhanced its enterprise mobility suite with the introduction of office mobile app
management with Windows Intune and Microsoft Azure RemoteApp. Subsequently, Microsoft launched
Surface Pro 3 tablet that offers the performance and mobility of a laptop. Microsoft enhanced its Microsoft
Dynamics CRM spring wave that delivers a comprehensive solution that provides businesses with
marketing, sales and customer care capabilities integrated with productivity applications, such as
Microsoft Office 365, Yammer, Lync, Skype, SharePoint and Power BI for Office 365. Microsoft and
American Family Insurance launched business accelerator for startups focused on home automation.
Subsequently, Microsoft devices group launched Nokia X2 and expanded its Nokia X family of
smartphones.

The company launched Microsoft Windows 97, Microsoft Office 97 and Internet Explorer 4.0.

Mexico’s Tax Administration System (SAT) selected Microsoft Azure cloud computing services, to

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enhance the services offered to tax payers of Mexico. Microsoft launched an online intellectual property
(IP) portal called the Microsoft 4Afrika IP Hub, to create an IP protection culture in Africa. Microsoft
Devices Group launched Nokia 130, a mobile phone with music and video player. Saudi Airlines
implemented the company’s business intelligence solution, including Microsoft SQL Server 2012, Power
BI for Office 365, Windows Server 2012 and Microsoft SharePoint Server 2013.

Microsoft released a cloud portal, new services and tools to simplify cloud development.

Microsoft and SAP expanded their global partnership to deliver new solutions in the areas including
enterprise cloud computing with SAP applications certification for Microsoft Azure; interoperability
between data from SAP applications and Microsoft Office; and mobile productivity with expanded
development and support for Windows and Windows Phone 8.1.

RCS MediaGroup modernized and unified its communications infrastructure and enabled flexible, cloud-
based collaboration through a comprehensive Microsoft technology solution that includes Microsoft Office
365, Windows Azure, Microsoft Lync 2013, Windows Server 2012 and Microsoft SharePoint 2013. Also,
Microsoft Open Technologies, a subsidiary of Microsoft, expanded its presence in China with the
establishment of a new subsidiary, Microsoft Open Technologies (Shanghai).

Microsoft expanded its partnership with Pearson VUE, and announced Microsoft Certified Professional
(MCP) and Microsoft Technology Associate (MTA) exams online in select locations. Also, Microsoft and
salesforce.com as part of their strategic partnership launched joint solutions, including Salesforce1 for
Windows, Salesforce for Office and Power BI for Office 365 and Excel integrations with Salesforce.
Accenture and Microsoft expanded their long-standing strategic alliance and introduced Accenture Hybrid
Cloud Solution for Microsoft Azure.

The Sheriff’s Department of the San Bernardino County, California, selected Microsoft Office 365 and
Windows 8.1 tablets, to meet the privacy and security CJIS requirements of the FBI and enable mobile
workers and streamlines communications. Also, the company announced a new roster of agency partners
to handle its advertising and media planning and buying. The company chose IPG as its agency of record
for advertising and global deployment while Dentsu Aegis will handle media planning, media buying and
search advertising.

Microsoft signed a definitive agreement to acquire Parature, a provider of cloud-based customer
engagement solutions. The acquisition is expected to add world-class customer self-service capabilities
to further accelerate the Microsoft Dynamics vision of helping organizations to deliver enhanced customer
experiences. Also, GoDaddy and Microsoft announced a long-term strategic partnership to offer Office
365 as GoDaddy’s exclusive core business-class email and productivity service to its small-business
customers. Subsequently, Microsoft was selected to be the cloud encoding and hosting platform provider
for NBC Olympics, a division of the NBC Sports Group, during its production of the 2014 Olympic Winter
Games in Sochi, Russia.

Microsoft and TracFone Wireless entered into a collaboration to provide mobile health management
solution offered through providers and insurers. Subsequently, the company signed an agreement to
acquire Mojang, a Stockholm-based game developer, and its “Minecraft” franchise for a consideration of
$2.5 billion. This acquisition is expected to enhance the company’s position in gaming industry.

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Microsoft and Canon signed a broad patent cross-licensing agreement and gained access to each other’s
patent portfolios.

Microsoft and Starcom MediaVest Group signed an agreement to work together on video ad experiences
across Microsoft’s portfolio of digital advertising assets. The company and Dell signed a patent licensing
agreement that allows both the companies to share technology and build on each other’s innovations.
Subsequently, the company signed a patent licensing agreement with Motorola Solutions. The license
provides worldwide coverage under Microsoft’s patent portfolio for Motorola Solutions’ devices running the
Android platform and Chrome OS operating system.

Microsoft completed its acquisition of the Nokia Devices and Services business following the approvals by
Nokia shareholders and by governmental regulatory agencies around the world.

Microsoft launched Xbox One, an all-in-one gaming and entertainment system. Subsequently, Microsoft
introduced the Cloud OS Network, a consortium of more than 25 cloud service providers delivering
services built on the Microsoft Cloud Platform: Windows Server with Hyper-V, System Center and the
Windows Azure Pack.

The company launched Xbox One, the all-in-one gaming and entertainment system.

Microsoft launched Windows Embedded 8 Handheld for enterprise handheld devices.

Freight railroad networks BNSF Railway, selected Microsoft Office 365 to move 40,000 mobile workers to
the cloud. Microsoft opened the Microsoft Cybercrime Center, a center of excellence for advancing the
global fight against cybercrime. Jean Coutu Group (PJC) selected Microsoft Dynamics for Retail to
manage all its retail operations, from its headquarters down to the point of sale (POS) devices in stores.

The company established four Microsoft specialty stores in Roseville, California; Arlington, Texas; Novi,
Michigan; and Seattle to expand its retail footprint.

Microsoft opened Microsoft Cybercrime Center, a center of excellence for fighting cybercrime. The center
combines Microsoft’s legal and technical expertise as well as tools and technology with cross-industry
expertise.

Grocery and general merchandise retailer Tesco selected Microsoft Office 365 for its companywide
collaboration and social platform. Subsequently, department store chain, JC Penney upgraded to the
cloud using Office 365 to create a new customer service experience and communications environment for
the team members. The Texas Department of Information Resources moved to the cloud with Microsoft
Office 365 as part of a statewide IT modernization strategy. The company launched Outlook.com, a new
email service. Microsoft and Nikon signed a patent licensing agreement that provides broad coverage
under Microsoft’s patent portfolio for certain Nikon cameras running the Android platform. The company
along with Toyota Racing Development, a subsidiary of Toyota Motor Sales, designed a touch-enabled
app on Windows 8 for Toyota’s NASCAR race teams. Microsoft and NBC Sports partnered to use
Windows Azure Media Services across NBC Sports’ digital platforms, including NBCSports.com,
NBCOlympics.com and GolfChannel.com.

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Microsoft Digital Crimes Unit in collaboration with Europol’s European Cybercrime Centre (EC3), the
Federal Bureau of Investigation (FBI) and leaders in the technology industry, including A10 Networks,
disrupted ZeroAccess, a rampant botnet. AOL, Apple, Facebook, Google, LinkedIn, Microsoft, Twitter and
Yahoo joined together to propose principles for reforming government surveillance laws and practices.

Microsoft and Docker entered into a strategic partnership to provide Docker with support for new
container technologies and create container applications across platforms. Subsequently, IBM and
Microsoft entered into a partnership to provide their respective enterprise software on Microsoft Azure
and IBM Cloud. Also, Microsoft and Dropbox entered into a partnership to integrate their services for
collaboration across Dropbox and Microsoft Office on phones, tablets and the web.

ABB deployed Microsoft Office 365 and Yammer as part of strategic initiative to improve collaboration
worldwide. Microsoft China and the Hainan government signed a memorandum of understanding (MoU)
which covers incubating the application of informatization, nurturing the software industry, developing the
next generation of IT, and protecting intellectual property rights to enable Hainan to transform into an
international tourism destination. Subsequently, Microsoft and Hon Hai, the parent company of Foxconn,
signed a worldwide patent licensing agreement that includes Microsoft’s patent portfolio for devices
running the Android and Chrome OS, including smartphones, tablets and televisions. Also, the company
partnered with Tanzania Commission for Science and Technology and UhuruOne, an internet service
provider, to provide wireless broadband access to university students and faculty in Dar es Salaam,
Tanzania and enable UhuruOne to offer Windows 8 device and service packages to universities in Dar es
Salaam. Microsoft and the National Football League (NFL) entered into a multi-year, landmark
partnership to deliver interactive NFL TV experiences for the next-generation Xbox One and leverage
Microsoft devices and services. Microsoft and Oracle announced a partnership that will enable customers
to run Oracle software on Windows Server Hyper-V and in Windows Azure.

Microsoft agreed to purchase substantially all of Nokia’s Devices & Services business, license Nokia’s
patents, and license to use Nokia’s mapping services. Microsoft launched a range of enterprise cloud
solutions, including New Windows Server, System Center, Visual Studio, Windows Azure, Windows
Intune, SQL Server, and Dynamics solutions.

AT&T partnered with Microsoft to deliver a security-enhanced cloud solution that will allow enterprise
customers to connect to Microsoft’s cloud platform using a private network.

Microsoft also signed exFAT licensing agreement with German automotive company, BMW. Microsoft
provided a $2 billion loan to the group that proposed to take Dell private.

Microsoft acquired InRelease Business Unit from InCycle Software, a provider of application lifecycle
management (ALM) services and release management solutions on the .NET platform. Microsoft
announced the initial phase of its business-channel expansion plans for the Surface family of PCs, along
with AppsForSurface, a new Surface application-development program for independent software vendors
(ISVs). An airline group, International Airlines Group (IAG), the parent company of British Airways and
Iberia selected Microsoft Office 365 as the business communication solution for approximately 58,000
employees.

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Wipro Technologies, the global IT, consulting and outsourcing business of Wipro, migrated to Microsoft
Lync Server 2010. The company acquired Perceptive Pixel, a company engaged in research,
development and production of large-scale, multi-touch display solutions.

The company and Pegatron signed a patent agreement that provides coverage under Microsoft’s patent
portfolio for a broad array of Pegatron products, including eReaders, smartphones and tablets running the
Android or Chrome platforms. Also, Barnes & Noble and Microsoft formed a strategic partnership to
advance digital reading technologies. Subsequently, Nike teamed up with Microsoft to launch Nike+
Kinect Training fitness program on Kinect for XboX 360. Subsequently, General Electric, through its
healthcare IT business, and Microsoft formed Caradigm, a 50-50 joint venture aimed at enabling health
systems and professionals to use real-time, organization-wide intelligence. Federal Aviation
Administration selected Microsoft Office 365 for email and collaboration in the cloud. The company
entered into a patent cross-license agreement with Amdocs Software Systems, a provider of software and
services. The patent agreement provides mutual access to each company’s patent portfolio, including a
license under Microsoft’s patent portfolio covering Amdocs’ use of Linux-based servers in its data centers.
Further, Microsoft entered into an intellectual property licensing agreement with Sharp, which covers the
use of exFAT in smartphones distributed by Sharp based on the Android platform.

Cleveland-based software provider PreEmptive Solutions and Microsoft partnered to provide exception
analytics in Visual Studio 2012 and Team Foundation Server 2012. Spanish broadband and
telecommunications provider Telefonica selected Microsoft Mediaroom Product Suite for global
convergent video platform that will power its pay TV and over-the-top services across its operating
businesses, with first deployments in Brazil, Chile and Spain.

The company acquired Yammer, a provider of enterprise social networks, for $1.2 billion in cash. Lowe, a
chain of retail home improvement and appliance stores selected Office 365 across more than 1,745
stores and corporate offices in the US, Canada and Mexico.

Microsoft and General Electric announced plans to launch a joint venture.

Microsoft previewed the next major release of Windows Phone, code-named Mango. Microsoft launched
Office 365, its newest cloud offering in 40 countries.

The company rolled out next generation television (TV) on Xbox Live, the online entertainment service for
Xbox 360, by teaming up with 40 TV and entertainment providers in 20 countries across the world.

Microsoft announced support for system on chip (SoC) architectures from semiconductor companies Intel,
AMD, and ARM for next version of Windows. Also, Microsoft and Samsung unveiled the next generation
of Surface, which uses new technology that allows large displays. Subsequently, the company launched
Microsoft Dynamics customer relationship management (CRM) online cloud service globally and
showcased Microsoft Dynamics AX for retail R2. Further, Nokia and Microsoft announced plans for a
broad strategic partnership to build a new global mobile ecosystem. Turkish mobile operator Turkcell and
Microsoft’s Tag technology announced a new mobile marketing service called MobilKod, built by Turkcell
leveraging Microsoft. Subsequently, Dell collaborated with Microsoft and Stellaris Health Network to
deliver software-as-a-service (SaaS) analytics solutions for community hospitals.

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Microsoft and Toyota Motor formed a strategic partnership to build a global platform for Toyota Motor’s
next-generation telematics services using the Windows Azure platform. Also, Microsoft signed a patent
licensing agreement with Volkswagen’s software supplier e.solutions, providing the Germany-based
company access to extended file allocation table (exFAT) technology. Subsequently, the company
entered into an agreement with Capgemini where in the latter would market and deliver services around
Windows Azure in 20 countries.

Microsoft and China Standard Software signed an agreement to jointly develop, market and sell solutions
for the cloud-computing market in China. Subsequently, Microsoft entered into an agreement with Verizon
to launch new FiOS TV-powered entertainment experience on Xbox 360. Also, the company signed a
patent agreement with Quanta where in the latter will pay royalties for accessing a range of patents. Upon
formation, the new company will develop and market an open, interoperable technology platform and
clinical applications focused on enabling better population health management to improve outcomes and
the overall economics of health and wellness. Further, Microsoft and Japanese automaker Nissan
established strategic relationship for next-generation dealer management system using Microsoft
Dynamics CRM.

Microsoft collaborated with Philips to streamline radiology workflow and processes and formed strategic
alliance with electronic health records (EHR) solutions provider athenahealth to launch clinical solution to
better connect hospitals, physicians and patients.

The company acquired Skype, an internet communications company, for $8.5 billion.

Microsoft acquired California-based video discovery technology company VideoSurf. VideoSurf’s content
analytics technology is expected to enhance the search and discovery of entertainment content across
the company’s platform.

Microsoft and Yahoo! received clearance for their search agreement from both the US Department of
Justice and the European Commission, and announced plan to implement the deal. The implementation
involves transitioning Yahoo!’s algorithmic and paid search platforms to Microsoft, with Yahoo! becoming
the relationship sales force for both companies’ premium search advertisers globally.

Microsoft and HTC signed a patent agreement that provides coverage under Microsoft’s patent portfolio
for HTC’s mobile phones running the Android mobile platform. The company signed a patent cross-
licensing agreement with DENSO, a supplier of advanced automotive technology. Also, HP and Microsoft
collaborated to work together on a Microsoft Windows Azure platform appliance that will accelerate
adoption of cloud-based applications. Subsequently, Daimler migrated to Microsoft’s unified
communications, messaging and collaboration solutions. NEC, Intel, and Microsoft formed a strategic
relationship to provide an integrated digital signage offering for the global market, including Japan.

The company signed a patent cross-license agreement with Amazon.com, which provides both the
companies access to each other’s patent portfolio and covers a broad range of products and technology,
including coverage for Amazon’s e-reading device, Kindle, and Amazon’s use of Linux-based servers.

Microsoft opened the Microsoft Software and Services Excellence Center (SSEC) for developing next-
generation connected devices and cloud datacenters through integrating its software services and cloud

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datacenter technologies with Taiwan’s hardware expertise. The company unveiled the next generation of
SQL Server, Microsoft SQL Server code-named Denali, new offerings for business intelligence and
mission-critical workloads.

Capgemini and Microsoft formed an alliance, under which, Capgemini will market and offer the Microsoft
Business Productivity Online Suite, Microsoft’s cloud-based communication and collaboration service,
through its Global Service Line of Infostructure Transformation Services. The company sold its Microsoft
Expression Media product to Phase One, a player in digital photography. The company and Novell
collaborated to offer high-performance computing interoperability solution including server workload
management across SUSE Linux Enterprise Server and Windows HPC Server.

Microsoft partnered with Intuit to offer web applications to small businesses. Also, Microsoft partnered
with Interpublic Group (IPG), an advertising holding company, according to which IPG will designate
Microsoft’s Atlas as a preferred ad-server solution provider. Subsequently, Microsoft partnered with Ford
Motor to implement the Microsoft Hohm energy management application for Ford’s electric vehicles.
Further, Samsung Electronics and Microsoft signed an agreement to integrate Microsoft PlayReady
technology in a broad range of Samsung’s consumer products.

Microsoft acquired Sentillion, a company specializing in software for the healthcare industry.

Google acquired the patent license for Microsoft Exchange ActiveSync to implement it on Google
Servers.

Microsoft launched its first Microsoft Embedded Systems Development Centre (MESDC) in Aachen,
Germany; and Windows Embedded NavReady 2009, its first embedded operating system designed
specifically for OEMs building handheld portable navigation devices (PNDs).

Accenture and Microsoft formed an initiative, working with Avanade, a global IT consultancy created by
Accenture and Microsoft, to enable retailers address the challenge of linking consumers to technology
platforms such as social networking and online communities.

The company collaborated with comScore to develop a digital media planning solution, the Reach and
Frequency Planner, which will allow brand advertisers to predict reach, frequency and audience
composition at the ad placement level. Also, Microsoft and Nokia entered into an alliance to design,
develop and market mobile productivity solutions. Subsequently, the company together with Fundtech, a
global transaction banking solutions provider, launched the SEPA Integration Suite, a new suite of SOA
(service-oriented architecture) services. Temenos Group, a provider of integrated core banking systems,
and Microsoft formed an alliance for providing core banking solutions with TEMENOS T24 and Microsoft
SQL Server.

Microsoft and Infosys entered into a new go-to-market alliance to jointly launch solutions, services and a
center of excellence to help manufacturers build next-generation supply chains. Also, Microsoft partnered
with Cisco to support Unified Computing System to launch into the server datacenter market as an OEM.
Through this agreement, Cisco will pre-package, resell and support Windows Server 2003, Windows
Server 2008 with Hyper-V technology and Microsoft SQL Server 2008.

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Microsoft acquired four industry solutions to extend the capabilities of Microsoft’s enterprise resource
planning (ERP) products, Microsoft Dynamics AX. Also, the company acquired Teamprise-related assets
of SourceGear, which enable developers using the Eclipse IDE or operating on multiple operating
systems, including Unix, Linux and Mac OS X, to build applications with Microsoft Visual Studio Team
Foundation Server.

The company acquired BigPark, an interactive online gaming company based in Vancouver, British
Columbia. Subsequently, the company signed an agreement with Merck, a developer, manufacturer and
distributor of pharmaceuticals, and acquired certain assets of Rosetta Biosoftware, a business unit of
Rosetta Inpharmatics, a wholly owned subsidiary of Merck.

The company released the first public beta of Microsoft Windows HPC Server 2008, a server operating
system and tools designed for the high-performance computing (HPC) market.

The company made several acquisitions including Calista Technologies, a provider of graphics
technologies for desktop and presentation virtualization solutions; Kidaro, a provider of desktop
virtualization solutions for enterprises; Rapt, a provider of advertising yield management solutions for
digital media publishers; Danger, a provider of solutions to the mobile operators; Fast Search & Transfer,
a provider of enterprise search solutions; Navic Networks, a provider of television advertising solutions;
MobiComp, a company that allows backup and restoration of mobile data and mobile posting of social
content to web sites; and DATAllegro, a provider of breakthrough data warehouse appliances. The
company also sold Greenfield Online Internet survey solutions (ISS) business to ZM Surveys, a private
equity investment partnership focused on entertainment and media investments.

The company also entered into a strategic partnership with Reliance Communications to deliver internet
protocol television (IPTV) in India on the Microsoft Mediaroom Platform. Also, mass media provider
Viacom and Microsoft entered into a strategic alliance to collaborate on advertising, content distribution,
event promotions and games.

Logica and Microsoft formed a strategic relationship to launch an initiative called The Service Factory.

The company made several acquisitions, including Tellme Networks, a provider of voice services,
including nationwide directory assistance, enterprise customer service and voice-enabled mobile search;
aQuantive, a global digital marketing company; AdECN, an advertising exchange platform company;
Parlano, a developer of MindAlign, an application for enterprise group chat; Global Care Solutions (GCS),
a developer of enterprise-class health information systems; Musiwave, an Openwave company and a
provider of mobile music entertainment services; and Multimap, a global online mapping services provider
based in the UK.

Microsoft acquired MotionBridge, a provider of search technology designed specifically for mobile
operators and the mobile internet. Microsoft’s acquisitions included the assets of Onfolio, an internet
research and information management provider; Apptimum; ProClarity, a developer of advanced analysis
and visualization technologies; Lionhead Studios, a video game developer and creator of Fable, Xbox;
Massive, a developer of a network for video game advertising, to deliver dynamic, relevant ads across
Microsoft’s online services; Whale Communications, a provider of secure access products; Softricity, a
provider of application virtualization and dynamic streaming technologies; Winternals Software, a provider

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of Windows based enterprises with systems recovery and data protection solutions; Azyxxi, the health
intelligence software provider; and Colloquis, a provider of conversational online business solutions.

Microsoft acquired ActiveViews, a company based in Provo, Utah, to extend its business intelligence (BI)
platform; and GIANT Company Software, a provider of anti-spyware and internet security products. The
company acquired Sybari Software, a provider of security products that help businesses worldwide
protect their messaging and collaboration servers from viruses, worms, and spam; Groove Networks, a
provider of collaboration virtual office software; FrontBridge Technologies, a provider of managed
services that address corporate e-mail security, compliance and availability requirements; Teleo, a
provider of voice over internet protocol (VoIP) software and services; mediastreams.com, a software
company that develops communications applications based on VoIP technology; and FolderShare, a
provider of file synchronization and remote access technology.

Microsoft acquired the virtual machine solutions of Connectix, a provider of virtualization software for
Windows and Macintosh-based computing. Also, the company acquired PlaceWare, a provider of web
conferencing services that enables businesses to conduct real-time, interactive presentations and
meetings over the internet.

Microsoft set up its Indian headquarters.

The company acquired Firefly Network, a provider of technology that makes secure exchange of private
information on the internet possible; MESA Group, a Boston based company that offered tools and
services for customers who wish to transfer existing Lotus Notes applications to Microsoft Exchange
Server; and Valence Research, a developer of transmission control protocol/internet protocol (TCP/IP)
load balancing and fault tolerance software for the Microsoft Windows NT operating system.

The company entered into a partnership with Siemens and expanded into Brazil.

Microsoft signed an agreement with Apple to include Internet Explorer, a web browser application in the
latter’s Macintosh operating system.

Microsoft launched MSN (Microsoft Network), an umbrella service division for all online services of the
company. Also, Microsoft launched Active X, an application programming based on Microsoft Component
Object Model (COM) interface to embed control in many programming languages including the scripting
languages such as Jscript and VBScript. Subsequently, it introduced Microsoft SQL Server 6.5, a data
base management system with inbuilt support for internet applications.

The company launched Microsoft Visual Basic, a development software product. Microsoft also launched
Windows for Workgroups 3.1, an operating system with networking capabilities. In addition, the company
launched Microsoft Access, database software, in the same year. Microsoft released Microsoft Windows
95, the company’s flagship operating system. Subsequently, the company partnered with Spyglass, an
internet software company, and licensed the Spyglass’s web browser as Internet Explorer, which was
later included in Windows 95 Plus edition of operating system. The company released Microsoft
Sidewinder 3D pro, a joystick.

The company released its OS/2 operating system for original equipment manufacturer (OEMs). Microsoft

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bought a relational database management system (RDBMS) from enterprise software and services
company Sybase and named it as SQL server. Also, the company introduced Microsoft Office, a bundle
of separate office productivity applications including Microsoft Word and Excel.

The company became a publicly traded company.

The company launched Microsoft Windows, a graphical extension of its MS-DOS operating system.

The company was relocated to Redmond, Washington in the following year.

Microsoft also partnered with IBM to provide OS/2 operating system.

The company started its first international production facility in the Republic of Ireland.

The company launched its first PC-specific mouse known as the Microsoft Mouse. Also, the company
started Microsoft Press, a book publishing division on various Microsoft technologies. Microsoft created
MSX, a home computer system.

Microsoft was incorporated.

The company entered into a contract with IBM to provide an operating system for IBM’s personal
computer (PC) named PC-DOS.

The company acquired a variant of Unix from multinational telecommunications corporation AT&T and
launched it as Xenix, the company’s first operating system.

Microsoft moved from Albuquerque to Bellevue, Washington.

The company started its first international office in Japan as ASCII Microsoft.

Microsoft Corporation (Microsoft or “the company”) was founded when Bill Gates and Paul Allen
developed an interpreter for Basic programming language at Micro Instrumentation and Telemetry
Systems.

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Key Employees

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Key Employees

KEY EMPLOYEES

Name Job Title Board Compensation
John W. Thompson Chairman Executive Board 690000 USD
Kurt DelBene Chief Digital Officer and

Executive Vice President,
Corporate Strategy, Core
Services Engineering and
Operations

Senior Management

Satya Nadella Chief Executive Officer Executive Board 17692031 USD
Jeff Weiner Chief Executive Officer-

LinkedIn
Senior Management

Bala Girisaballa Chief Executive Officer-
Microsoft Accelerator,
India

Senior Management

Michal Golebiewski Chief Marketing and
Operations Officer,
Malaysia

Senior Management

Horace Chow Chief Operating Officer-
Microsoft China

Senior Management

Kevin Scott Chief Technology Officer Senior Management
Ifeanyi Amah Chief Technology Officer-

Microsoft Nigeria
Senior Management

Rimini Haraya Makama Corporate Affairs Director,
Microsoft Nigeria

Senior Management

Reid Hoffman Director

Non Executive Board

Teri L. List-Stoll Director Non Executive Board 312500 USD
G. Mason Morfit Director Non Executive Board 302500 USD
Charles H. Noski Director Non Executive Board 332500 USD
Helmut Panke Director Non Executive Board 317500 USD
Sandra E. Peterson Director Non Executive Board 177500 USD
Charles W. Scharf Director Non Executive Board 287500 USD
John W. Stanton Director Non Executive Board 317500 USD
Padmasree Warrior Director Non Executive Board 162500 USD
Harry Shum Executive Vice President-

Artificial Intelligence and
Research Group

Senior Management

Margaret L. Johnson Executive Vice President-
Business Development

Senior Management 6716490 USD

Amy E. Hood Executive Vice President-
Chief Financial Officer

Senior Management 10374630 USD

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Key Employees

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Christopher C.
Capossela

Executive Vice President-
Chief Marketing Officer

Senior Management

Kathleen T. Hogan Executive Vice President-
Human Resources

Senior Management

Scott Guthrie

Executive Vice President-
Microsoft Cloud and
Enterprise

Senior Management

Rajesh Jha Executive Vice President-
Office Product Group

Senior Management

Jean-Philippe Courtois Executive Vice President-
President, Microsoft
Global Sales, Marketing
and Operations

Senior Management

Terry Myerson Executive Vice President-
Windows and Devices
Group

Senior Management

Judson Althoff Executive Vice President-
Worldwide Commercial
Business

Senior Management

William H. Gates III Founder and Technology
Advisor

Non Executive Board

Akin Banuso General Manager-Nigerian
operation

Senior Management

Sriram Rajamani Managing Director-
Microsoft India lab

Senior Management

Bradford L. Smith President-Chief Legal
Officer

Senior Management 8610612 USD

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Key Employee Biographies

KEY EMPLOYEE BIOGRAPHIES

John W. Thompson

Board:Executive Board
Job Title:Chairman
Since:2014
Age:67

John W. Thompson has been the Chairman at Microsoft since 2014. Most recently, Mr. Thomson served
as the Chief Executive Officer at Virtual Instruments. He previously served as the Chairman and Chief
Executive Officer at Symantec. Mr. Thomson also held a number of leadership positions at IBM, including
sales, marketing, software development, and served as the General Manager of IBM Americas.

Kurt DelBene

Board:Senior Management

Job Title:Chief Digital Officer and Executive Vice President, Corporate Strategy, Core Services
Engineering and Operations

Kurt DelBene currently serves as the Chief Digital Officer and Executive Vice President of Corporate
Strategy, Core Services Engineering and Operations at Microsoft. From 2013 to 2014, Mr. DelBene
worked at Healthcare.gov as a Senior Advisor to the Secretary of Health and Human Services. He was
also the liaison to White House and Health and Human Services senior leadership. Prior to that, Mr.
DelBene served as the President at the Microsoft Office Division from 2010 to 2013. He joined Microsoft
in 1992, and held various positions, including the Senior Vice President for Microsoft Business Division;
the Vice President of Authoring and Collaboration Services, a General Manager of Microsoft Outlook, and
as the Group Project Manager for Microsoft Exchange. Prior to joining the company, Mr. DelBene worked
at McKinsey and Company as a Management Consultant.

Satya Nadella

Board:Executive Board
Job Title:Chief Executive Officer
Since:2014
Age:49

Satya Nadella has been the Chief Executive Officer at Microsoft since 2014. Prior to this, Mr. Nadella
served as the Executive Vice President of Cloud and Enterprise business at the company. Previously, he
was the Senior Vice President of R&D for the Online Services Division and the Vice President of the
Microsoft Business Division. Before joining Microsoft in 1992, Mr. Nadella was a Member of the
technology staff at Sun Microsystems.

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Reid Hoffman

Board:Non Executive Board
Job Title:Director
Since:2017

Reid Hoffman has been a Director at Microsoft since 2017. Mr. Hoffman also serves on the Boards at
private companies, including Edmodo, Convoy, and Blockstream. He joined Greylock Partners in 2009.
Mr. Hoffman co-founded LinkedIn in 2003 and served as the Chief Executive Officer. Prior to LinkedIn, he
served as the Executive Vice President at PayPal.

Teri L. List-Stoll

Board:Non Executive Board
Job Title:Director
Since:2014
Age:53

Teri L. List-Stoll has been a Director at Microsoft since 2014. Ms. List-Stoll served as the Executive Vice
President and Chief Financial Officer at DICK’S Sporting Goods. Previously, she served as the Executive
Vice President and Chief Financial Officer and as a Senior Advisor at Kraft Foods Group. Prior to that,
Ms. List-Stoll served at Procter & Gamble for 20 years, and held various roles in business unit
management, supply chain, sales, accounting, and financial planning and analysis, most recently as the
Senior Vice President and Treasurer. From 1991 to 1993, she served as a Fellow at Financial Accounting
Standards Board. Before that, Ms. List-Stoll worked for nine years at Deloitte & Touche. She serves on
the Boards at Danaher.

G. Mason Morfit

Board:Non Executive Board
Job Title:Director
Since:2014
Age:41

G. Mason Morfit has been a Director at Microsoft since 2014. Mr. Morfit is the President at ValueAct
Capital. Prior to that, he worked in equity research at Credit Suisse First Boston’s healthcare group
covering the managed care industry. Mr. Morfit served as a Director at Valeant Pharmaceuticals
International, CR Bard, Immucor, Advanced Medical Optics, Solexa, and MSD Performance.

Charles H. Noski

Board:Non Executive Board
Job Title:Director
Since:2003
Age:64

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Charles H. Noski has been a Director at Microsoft since 2003. Mr. Noski served as the Vice Chairman at
Bank of America from 2011 until 2012. From 2010 through 2011, he served as the Executive Vice
President and Chief Financial Officer at Bank of America. From 2003 to 2005, Mr. Noski was the
Corporate Vice President and Chief Financial Officer at Northrop Grumman and served as a Director from
2002 to 2005. He joined AT&T in 1999 as the Senior Executive Vice President and Chief Financial Officer
and was named as the Vice Chairman at AT&T in 2002. Prior to that, Mr. Noski was the President, Chief
Operating Officer, and a Director at Hughes Electronics. He serves on the Boards at Avon Products and
The Priceline Group.

Helmut Panke

Board:Non Executive Board
Job Title:Director
Since:2003
Age:70

Helmut Panke has been a Director at Microsoft since 2003. Dr. Panke served as the Chairman of the
Board of Management at BMW from 2002 through 2006. From 1999 to 2002, he served as a Member of
the Board of Management for Finance. From 1996 to 1999, Dr. Panke was a Member of the Board of
Management for Human Resources and Information Technology. He joined BMW in 1982 and served as
the Chairman and Chief Executive Officer from 1993 to 1996. Dr. Panke serves on the Boards at
Singapore Airlines.

Sandra E. Peterson

Board:Non Executive Board
Job Title:Director
Since:2015
Age:57

Sandra E. Peterson has been a Director at Microsoft since 2015. Ms. Peterson serves as the Group
Worldwide Chairman at Johnson & Johnson. Prior to that, she served as the Chairman and Chief
Executive Officer at Bayer CropScience. Ms. Peterson also worked at Medco Health Solutions from 1999
to 2004.

Charles W. Scharf

Board:Non Executive Board
Job Title:Director
Since:2014
Age:51

Charles W. Scharf has been a Director at Microsoft since 2014. Mr. Scharf has been the Chief Executive
Officer and a Director at Visa since 2012. Prior to that, he was a Managing Director at One Equity
Partners. Before that, Mr. Scharf served as the Chief Executive Officer of Retail Financial Services at
JPMorgan Chase from 2004 to 2011 and as the Chief Executive Officer of Retail division at Bank One

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from 2002 to 2004. He also served as the Chief Financial Officer at Bank One, the Global Corporate and
Investment Bank division at Citigroup, and at Salomon Smith Barney and its predecessor company from
1995 to 1999.

John W. Stanton

Board:Non Executive Board
Job Title:Director
Since:2014
Age:61

John W. Stanton has been a Director at Microsoft since 2014. Mr. Stanton serves as the Chairman at
Trilogy Equity Partners. Previously, He served as the Chief Operating Officer and Vice Chairman at
Western Wireless. Prior to that, Mr. Stanton served as the Chairman and Chief Executive Officer at
VoiceStream Wireless which was acquired by Deutsche Telekom and subsequently renamed T-Mobile
USA. From 2008 to 2013, he served as the Chairman and a Director at Clearwire. Before that, Mr.
Stanton served as the Chief Operating Officer and Vice Chairman at McCaw Cellular. He serves on the
Board at Columbia Sportswear and Costco Wholesale. Mr. Stanton has been the Chairman at First
Avenue Entertainment since 2016.

Padmasree Warrior

Board:Non Executive Board
Job Title:Director
Since:2015
Age:55

Padmasree Warrior has been a Director at Microsoft since 2015. Ms. Warrior serves as the Chief
Development Officer and the Chief Executive Officer of the US office at NextEV. She also served as the
Chief Technology Officer at Cisco Systems. Prior to that, Ms. Warrior held various executive roles at
Motorola, most recently as the Executive Vice President and Chief Technology Officer from 2003 to 2007.

Margaret L. Johnson

Board:Senior Management
Job Title:Executive Vice President-Business Development
Since:2014
Age:54

Margaret L. Johnson has been the Executive Vice President of Business Development at Microsoft since
2014. Prior to this role, Ms. Johnson spent 24 years at Qualcomm where she held various leadership
positions across engineering, sales, marketing and business development. Most recently, she served as
the Executive Vice President at Qualcomm and the President of global market development where she
was responsible for commercializing new business opportunities and developing strategic relationships
for the company. Ms. Johnson was also responsible for Qualcomm’s global marketing organization and
oversaw Qualcomm Labs, a wholly owned subsidiary of Qualcomm. Prior to joining Qualcomm, she

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worked as an Engineer at General Electric’s Military Electronics Division.

Amy E. Hood

Board:Senior Management
Job Title:Executive Vice President-Chief Financial Officer
Since:2013
Age:44

Amy E. Hood has been the Executive Vice President and Chief Financial Officer at Microsoft since 2013.
Prior to this, Ms. Hood was the Chief Financial Officer at Microsoft’s Business Division. She joined
Microsoft in 2002 and held several positions in the Server and Tools Business as well as the corporate
finance organization. Prior to that, Ms. Hood worked at Goldman Sachs in various investment banking
and capital markets group roles.

Christopher C. Capossela

Board:Senior Management
Job Title:Executive Vice President-Chief Marketing Officer
Since:2014
Age:46

Christopher C. Capossela has been the Executive Vice President and Chief Marketing Officer at Microsoft
since 2014. Mr. Caposella has over 20 years of experience at the company and held a variety of
marketing leadership roles. Previously, he served in the Microsoft Office Division and was responsible for
marketing the company’s productivity solutions including Microsoft Office, Office 365, SharePoint,
Exchange, Lync, Project and Visio. Most recently, Mr. Caposella served as the Worldwide Leader of the
Consumer Channels Group, responsible for sales and marketing activities with OEM, operator and retail
partners.

Kathleen T. Hogan

Board:Senior Management
Job Title:Executive Vice President-Human Resources
Since:2014
Age:50

Kathleen T. Hogan has been the Executive Vice President of Human Resources at Microsoft since 2014.
Prior to this, Ms. Hogan was the Corporate Vice President at Microsoft Services. She also served as the
Corporate Vice President of Customer Service and Support at the company. Ms. Hogan joined the
company in 2003 as the Customer and Partner Experience and Worldwide Field Operations. Prior to that,
she worked at McKinsey and Oracle. Ms. Hogan sits on the Board of Directors at Puget Sound affiliate of
Susan G. Komen for the Cure and the Technology Services Industry Association.

Scott Guthrie

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Board:Senior Management
Job Title:Executive Vice President-Microsoft Cloud and Enterprise

Scott Guthrie serves as the Executive Vice President of Microsoft Cloud and Enterprise Group at
Microsoft. Prior to leading the Cloud and Enterprise group, Mr. Guthrie led Microsoft Azure, Microsoft’s
public cloud platform. Since joining the company in 1997, he has made critical contributions to many of
Microsoft’s key cloud, server and development technologies and was one of the original founders of the
.NET project.

Rajesh Jha

Board:Senior Management
Job Title:Executive Vice President-Office Product Group

Rajesh Jha currently serves as the Executive Vice President of Office Product Group at Microsoft. Most
recently, Mr. Jha served as the Corporate Vice President at the company. He joined the company in
1990. Mr. Jha began his career as a Software Design Engineer, working on various clients, servers and
services during his tenure.

Jean-Philippe Courtois

Board:Senior Management
Job Title:Executive Vice President-President, Microsoft Global Sales, Marketing and Operations
Since:2016
Age:55

Jean-Philippe Courtois has been the Executive Vice President and President, Microsoft Global Sales,
Marketing and Operations at Microsoft since 2016. Previously, Mr. Courtois served as the President of
Microsoft International. Before that, he held the same role for the EMEA region (Europe, Middle East and
Africa) as the Chief Executive Officer and President of Microsoft EMEA. Mr. Courtois joined Microsoft in
1984 as a Channel Sales Representative and was promoted to General Manager for Microsoft France in
1994. He is also the Chairman of the board of directors at SKEMA Business School, as well as a Board
Member at Positive Planet, a worldwide leading NGO.

Terry Myerson

Board:Senior Management
Job Title:Executive Vice President-Windows and Devices Group

Terry Myerson serves as the Executive Vice President of Windows and Devices Group at Microsoft. Prior
to this, Mr. Myerson led the Operating Systems Group. Previously, he led the Windows Phone team and
Exchange team. Before that, Mr. Myerson founded Interse, one of the first Web software companies.

Judson Althoff

Board:Senior Management

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Job Title:Executive Vice President-Worldwide Commercial Business

Judson Althoff currently serves as the Executive Vice President, Worldwide Commercial Business at
Microsoft. Prior to this role, Mr. Althoff was the President of North American operation at the company. He
joined Microsoft in 2013. Mr. Althoff previously spent 14 years at Oracle where he most recently served
as the Senior Vice President. He also worked at EMC.

William H. Gates III

Board:Non Executive Board
Job Title:Founder and Technology Advisor
Age:60

William H. Gates III serves as the Founder and Technology Advisor at Microsoft. Mr. Gates has been a
Director at the company since 1981. Prior to this, he was the Chairman of the Board at Microsoft from
1981 to 2014. Mr. Gates retired as an employee at Microsoft in 2008. He previously served as the Chief
Software Architect at the company from 2000 to 2006 and the Chief Executive Officer from 1981 until
2000. Mr. Gates is the co-Chair of the Bill & Melinda Gates Foundation and serves as a Director at
Berkshire Hathaway.

Bradford L. Smith

Board:Senior Management
Job Title:President-Chief Legal Officer
Since:2015
Age:57

Bradford L. Smith has been the President and Chief Legal Officer at Microsoft since 2015. Previously, Mr.
Smith served as the Executive Vice President, General Counsel, and Secretary at the company. He
joined Microsoft in 1993, and held various positions, including the Senior Vice President, General
Counsel, and Secretary in 2001, the Chief Compliance Officer in 2002, and as a Deputy General Counsel
for Worldwide Sales. Mr. Smith serves on the Board of Directors at Netflix.

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Major Products & Services

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Major Products & Services

MAJOR PRODUCTS & SERVICES

Microsoft Corporation (Microsoft or “the company”) develops, licenses, and supports a range of software
products and services. The company’s key products, services and brands include the following:

Products:

Operating systems
Cross-device productivity applications
Server applications
Business solution applications
Desktop and server management tools
Software development tools
Video games
Training and certification of computer system integrators and developers
Personal Computers (PCs)
Tablets
Gaming and entertainment consoles
Phones
Related accessories

Services:

Cloud-based solutions
Solution support
Consulting services

Brands:

Windows
Office
Windows Azure
Skype
Xbox
Lumia

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SWOT Analysis

SWOT ANALYSIS

Microsoft Corporation (Microsoft or “the company”) develops, licenses, and supports a range of software
products and services. The company also designs, manufactures and sells devices that integrate with
cloud-based services. In addition, it offers relevant online advertising to global audience. Microsoft’s
established market presence enables it to offer end-to-end solutions for consumer as well as enterprise
clients. In addition, it provides significant cross selling opportunities thus winning a larger share of the
client budget. However, declining PC market is expected to impact the demand for the company’s
products thus shrinking its revenues and affecting margins.

Strength

Strong R&D Capabilities

Broad Products and Services Portfolio

Established market presence

Weakness

Legal Proceedings

Substantial Indebtedness

Opportunity

Increasing Adoption of Cloud Computing Services

Poised to Benefit from the Growing IoT Market

Strategic Acquisition of LinkedIn

Strategic Partnership with Adobe

Growing Application Servers Market

Threat

Adverse Trends in the PC Market

Government Litigation and Regulatory Activity

Intense Competition

Strength
Strong R&D Capabilities

Microsoft has a strong focus on research and development (R&D). The company commits significant
resources in developing technologies, tools, and platforms spanning digital work and life experiences,
cloud computing, and devices operating systems and hardware. In FY2016, approximately 37,000
associates were engaged in R&D activities. The company’s main R&D facilities are located in Redmond,
Washington. Microsoft also operates R&D facilities in other parts of the US and around the world,
including Canada, China, Denmark, Finland, France, India, Ireland, Israel, Japan, and the UK. In addition
to its R&D operations, Microsoft operates Microsoft Research, a computer science research organizations
which work in close collaboration with top universities around the world. The company develops its
products internally through three engineering groups, including Applications and Services Engineering
Group, Cloud and Enterprise Engineering Group, and Windows and Devices Engineering Group.

The company’s total R&D expense was approximately $12 billion, $12 billion, and $11.4 billion during
FY2016, FY2015, and FY2014, respectively. These amounts represented 14%, 13%, and 13% of the
company’s total revenue in FY2016, FY2015, and FY2014, respectively. The company’s strong R&D has
enabled it to add a number of patents. At the end of FY2016, the company had a patent portfolio of over

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61,000 issued in the US and international patents and over 35,000 pending patents. The company’s
strong R&D focus has enabled it to launch new solutions. For instance, in October 2016, the company
introduced Surface Studio, a new class of device that transforms from a workstation into a powerful digital
canvas; Surface Dial, a new peripheral designed for the creative process; and Surface Book with
Performance Base, a laptop with 6th Generation Intel Core i7 processors. Further in September 2016,
Microsoft formed the Microsoft AI and Research Group, bringing together Microsoft’s research
organization with more than 5,000 computer scientists and engineers focused on the company’s AI
product efforts.

Strong R&D capabilities allow Microsoft to attain competitive advantage over its peers, maintain
technological edge over its competitors and to stay ahead of industry trends. In addition, it also allows the
company to differentiate its products with its competitors.

Broad Products and Services Portfolio

Broad range of products and services helps Microsoft to generate revenue from diversified sources, whilst
mitigating the risk associated with concentrated product and service offerings. The company operates its
business through three business segments: More Personal Computing; Productivity and Business
Processes; and Intelligent Cloud. More Personal Computing segment consists of products and services
for end users, developers, and IT professionals. This segment primarily comprises Windows, including
Windows original equipment manufacturer (OEM) licensing and other non-volume licensing of the
Windows operating system, volume licensing of the Windows operating system, patent licensing,
Windows Embedded, MSN display advertising, and Windows Phone licensing; Devices, including
Microsoft Surface, phones, and personal computer (PC) accessories; Gaming, including Xbox hardware;
Xbox Live, comprising transactions, subscriptions, and advertising; video games; and third-party video
game royalties; and Search advertising.

Microsoft’s Productivity and Business Processes segment consists of products and services in its portfolio
of productivity, communication, and information services, spanning various devices and platforms. This
segment primarily comprises Office Commercial, including volume licensing and subscriptions to Office
365 commercial for products and services such as Office, Exchange, SharePoint, and Skype for
Business, and related Client Access Licenses (CALs); Office Consumer, including Office sold through
retail or through an Office 365 consumer subscription, and Office Consumer Services, including Skype,
Outlook.com, and OneDrive; and Dynamics business solutions, including Dynamics ERP products,
Dynamics CRM on-premises, and Dynamics CRM Online. Intelligent Cloud segment offers public, private,
and hybrid server products and cloud services for businesses. The segment primarily comprises Server
products and cloud services, including SQL Server, Windows Server, Visual Studio, System Center, and
related CALs, as well as Azure; and Enterprise Services, including premier support services and Microsoft
consulting services.

Broad offerings reduces dependence on any particular segment, apart from minimizing its business risks,
and helping the company to serve a diversified customer base and generate higher revenue.

Established market presence

The company has an established presence in the software market. Microsoft is one of the leading players

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in the software industry through its Windows operating system (OS) and Office utility tools. According to
industry estimates, the Windows OS had a market share of 89% during April 2016. Windows 10 was
installed on over 75 million personal computers (PCs) in its first four weeks, and passed 110 million after
10 weeks of its release. Further, the company had a market share of 11% in the cloud market, only next
to Amazon, which had a market share of 31%. According to the company, more than 1.2 billion people
use Office in 140 countries in 107 languages. In the software domain, the company’s Office 365
Consumer subscribers increased to 23.1 million. The Office has been downloaded 340 million times on
iPhones, iPad, and Android devices. Microsoft Dynamics CRM Online seat additions more than doubled
year-over-year. Further in FY2016, Microsoft Azure revenue grew 113%, with usage of Azure compute
and Azure SQL database more than doubling year-over-year. Also 80% of Fortune 500 use Microsoft
Cloud. In addition, the company had more than 33,000 enterprise mobility services customers at the end
of FY2016. Also, Windows 10 is active on more than 400 million devices around the world. Furthermore,
Xbox Live monthly active users grew 33% year-over-year to 49 million. The company’s app store had
over 669,000 apps for phones, desktops and tablets. Moreover, the company’s Outlook.com has over 400
million active users, and Skype is used to make over three billion minutes of calls each day.

The company’s robust presence enables it to offer end-to-end solutions for consumer as well as
enterprise clients. In addition, it provides significant cross selling opportunities thus winning a larger share
of the client budget.

Weakness
Legal Proceedings

The company is exposed to various lawsuits and litigations which could increase the costs and margins.
Antitrust and unfair competition class action lawsuits were filed against Microsoft in British Columbia. The
trial of the British Columbia action commenced in May 2016. The plaintiffs are expected to file their case
in chief in August 2016, setting out claims made, authorities, and evidence in support. A six-month oral
hearing is scheduled to commence in September 2017, consisting of cross examination on witness
affidavits. In 2014, Microsoft was informed that China’s State Administration for Industry and Commerce
(SAIC) had begun a formal investigation relating to China’s Anti-Monopoly Law, and SAIC conducted
onsite inspections of Microsoft offices in Beijing, Shanghai, Guangzhou, and Chengdu. SAIC started the
investigation relating to compatibility, bundle sales, file verification issues related to Windows and Office
software, and potentially other issues. In addition, the company has approximately 54 other patent
infringement cases pending against it. As on June 30, 2016, the company had accrued aggregate legal
liabilities of $521 million in other current liabilities. In addition, the company anticipates its legal costs
could reach approximately $1.6 billion in aggregate.

The fines would impact the company’s cost structure adversely in turn impacting profitability and also
entails large outlays of cash. These lawsuits and litigations would also have a negative impact on the
brand image of the company.

Substantial Indebtedness

The company has a substantial amount of indebtedness. As of June 30, 2016, the company’s total debt

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was $40,783 million. This amount of indebtedness could have important consequences which include
fulfilling cash obligations; limiting the company’s ability to fund potential acquisitions; dedicating a portion
of cash flow from operations to pay debts, which would reduce the availability of cash flow to fund working
capital requirements, capital expenditures and other general corporate purposes; limiting flexibility in
planning for, or reacting to, general adverse economic conditions or changes in business or industry in
which the company operates; and placing Microsoft at a competitive disadvantage compared to
competitors that have less debt.

In addition to the substantial amount of indebtedness, the company may incur additional indebtedness in
the future. If new debt is added to the current debt levels, the related risks that the company currently
faces could intensify. Substantial indebtedness could adversely affect the company’s operations and
financial results and prevent it from fulfilling obligations.

Opportunity
Increasing Adoption of Cloud Computing Services

The worldwide demand for cloud computing services is expected to grow significantly in the coming
years. Cloud computing is a computing infrastructure model, which enables delivery of software-as-a-
service (SaaS). Appeal to cloud computing has been increasing as it enables companies to reduce their
expenses related to upfront royalty or licensing payments, investment in hardware infrastructure and
other operating expenses. According to MarketLine, the global cloud computing industry is expected to
generate total revenues of $89.3 billion in 2016, representing a CAGR of 34.2% between 2012 and 2016.
Furthermore, the performance of the industry is forecast to accelerate, with an anticipated compound
annual growth rate (CAGR) of 35.6% for the 2016-21 periods, which is expected to drive the industry to a
value of $409.6 billion by the end of 2021.

As the rate of businesses moving to the cloud continues to accelerate, Microsoft has several unique
advantages that can be leveraged to drive growth from its cloud offering which primarily includes
Windows Azure, Office 365 and Dynamics CRM. The company offers these cloud services through
Microsoft’s Windows and Windows Phone operating systems, thus adding SaaS component to its PaaS
and IaaS services. In July 2016, GE partnered with Microsoft to bring its Predix platform for the Industrial
Internet available on the Microsoft Azure cloud for industrial businesses. Further, in February 2017,
Microsoft and Flipkart entered into a strategic partnership, whereby Flipkart will incorporate Microsoft
Azure as its public cloud platform.

The enterprises are moving to the cloud on their terms and often use hybrid solutions that include the
cloud and their existing datacenter investments. The company’s increasing presence in the cloud
computing market and the growing end market will provide an opportunity for Microsoft to gain new
customers and increase its market share in the future.

Poised to Benefit from the Growing IoT Market

With increasing adoption of cloud services and the big data services, the Internet of Things (IoT) market
is rapidly growing. According to industry estimates, rising adoption of cloud platforms, development of

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cheaper and smarter sensors, and evolution of high speed networking technologies has been driving the
demand for IoT and wearables. The IoT market is expected to reach $661.7 billion by 2021 from $157.1
billion in 2016, growing at a CAGR of 33.3% during 2016-21 periods.

Microsoft is poised to benefit from the strong growth in the IoT market. The company offers Microsoft
Azure IoT services that include Azure Event Hubs, Azure DocumentDB, Azure Stream Analytics, Azure
Notification Hubs, Azure Machine Learning, Azure HDInsight, and Microsoft Power BI. Further in April
2016, Microsoft collaborated with Rolls-Royce to bring new capabilities to Rolls-Royce customers. Rolls-
Royce will integrate Microsoft Azure IoT Suite and Cortana Intelligence Suite into its service solutions to
expand its digital capabilities to support the current and next generation of Rolls-Royce intelligent
engines.

The company’s growing presence in the IoT market coupled with the growing end markets will enable it to
drive strong revenues and enhance its market share in the future.

Strategic Acquisition of LinkedIn

The strategic acquisition of LinkedIn is expected to enhance the company’s footprint in the enterprise
social media market and provide incremental growth prospects. In December 2016, Microsoft completed
the previously announced acquisition of LinkedIn for approximately $26.2 billion, inclusive of LinkedIn’s
net cash. LinkedIn is one of the largest professional social network. The company offers a comprehensive
platform that provides members with solutions, including applications and tools, to search, connect and
communicate with business contacts, learn about career opportunities, join industry groups, research
organizations and share information. LinkedIn has approximately 400 million members in over 200
countries and territories. The company also operates Lynda.com, a leading online learning platform. The
acquisition is expected to provide Microsoft a larger reach in the social networking services and
professional content business. Additionally, LinkedIn’s large social network includes groups of employees
and employers, which would act as a sales channel for Microsoft products, and also serve as a
complement to those that it already offers for collaboration and communication.

According to Microsoft, LinkedIn’s social graph and Sales Navigator could be offered as an integrated
selling tool along Microsoft’s Dynamics CRM and other systems. Such an integration is expected to
provide robust background information about users that can help find leads, open conversations and
close deals. Microsoft could also use LinkedIn’s Lynda business to help sell Microsoft software products,
and provide assistance in learning to use them. Furthermore, the acquisition is expected to bolster
Microsoft’s cloud business and counter the threat of rising Google’s Chromebook sales, which is
impacting the sales of Windows based personal computers (PCs). The deal is expected to create a
market for both LinkedIn and Microsoft’s Office products and would enable the combination of leading
professional cloud with the leading professional network to strengthen its position as the one-stop-shop
enterprise IT provider. This strategic combination is expected to establish Microsoft as a leader in data on
the professional world, both at the organizational and individual level and drive growth from the growing
trends of technology, including growing cloud based markets and datacenter markets, among others.

Thus, the strategic acquisition of LinkedIn would enable Microsoft to enter the social networking business
in a strategic way that complements its existing, largely untapped user data and provide incremental
growth prospects in the medium to long term.

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Strategic Partnership with Adobe

Microsoft’s strategic partnership with Adobe is expected to boost its cloud business in the medium to long
term. In September 2016, Adobe and Microsoft entered into a strategic partnership to help enterprise
companies embrace digital transformation. As part of the partnership, Adobe will make Microsoft Azure as
its preferred cloud platform for the Adobe Marketing Cloud, Adobe Creative Cloud and Adobe Document
Cloud. With the partnership, Adobe will bring its creative marketing software programs like Photoshop
and Illustrator to Microsoft’s Azure cloud-computing service, while Microsoft will make Adobe’s marketing
programs the favored choice for its internet-based software that manages customer relationships. Azure
will provide Adobe with a global cloud and data platform for intelligent services, including machine
learning and cognitive capabilities in Microsoft Cortana Intelligence Suite and SQL Server.

The partnership is expected to boost Azure’s customer base as Adobe Creative Cloud has more than
seven million subscribers. It would also minimize the customized work their customers’ software
developers have to do to make their products work together, paving the way for increased subscriptions.
The deal brings the marketing capabilities on cloud to help companies digitally transform and engage
customers in new ways and easily work across Adobe Marketing Cloud and Dynamics 365 business
applications, leveraging artificial intelligence, machine learning and advance analytics. The partnership
will also add enterprise application weight to the Azure platform, while the addition of Adobe’s Marketing
Cloud will strengthen Microsoft’s marketing product and enable it to complete more effectively with
Salesforce.

Thus, the strategic partnership with Adobe is expected to boost Microsoft’s client base and service
portfolio, boosting its topline performance in the medium to long term.

Growing Application Servers Market

The application server market is expected to achieve strong growth primarily driven by the evolution of
the mobile internet and IoT. Application servers are used to create apps that run on mobile devices and
enable IoT. According to industry estimates, the worldwide application server market is forecasted to grow
at a CAGR of 17% during 2016-24 periods to reach $24 billion by 2024. The increasing demand for
applications to support smartphones, tablets, and integrate with the IoT is expected to drive the
application server market growth over the forecast period.

Microsoft develops and markets server software, software developer tools, cloud-based services, and
solutions. The company’s server software includes integrated server infrastructure and middleware which
is designed to support software applications built on the Windows Server operating system. This includes
the server platform, database, business intelligence (BI), storage, management and operations,
virtualization, service-oriented architecture platform, security and identity software. The company also
builds standalone and software development lifecycle tools for software architects, developers, testers
and project managers. It also offers a platform that helps developers build and connect applications and
services in the cloud or on premise. The robust demand in the application servers market coupled with
Microsoft’s strong server portfolio will further enhance the company’s growth prospects.

Threat

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Adverse Trends in the PC Market

The global PC market has been decelerating recently. A broader slowdown in the economy, particularly in
developing economies that had been growing very quickly in the recent past, and new competition from
the iPad, other tablets, and smartphones are contributing to deteriorating PC sales. Global economic
issues like falling commodity prices and weak international currencies, as well as social disruptions in
EMEA and Asia-Pacific that disrupted foreign markets, were a large factor behind weak PC sales.
According to industry estimates, the global PCs market is expected to decline at a compound annual rate
of change (CARC) of 2.8% to reach 126.3 billion in 2020, as compared to 143.5 billion in 2015. The
adverse impact of the continued PC sales declines will be detrimental for the company.

Government Litigation and Regulatory Activity

The company’s operations are closely scrutinized by government agencies under the US and foreign
competition laws. Some jurisdictions also provide private rights of action for competitors or consumers to
assert claims of anti-competitive conduct. For example, European Commission closely scrutinizes the
design of Microsoft products and the terms on which certain technologies used in these products, such as
file formats, programming interfaces, and protocols, are available to other companies. In 2004, the
Commission ordered Microsoft to create new versions of Windows that do not include certain multimedia
technologies and to provide competitors with specifications for how to implement certain proprietary
Windows communications protocols in their own products. These obligations may limit the company’s
ability to innovate in Windows or other products in the future, diminish the developer appeal of the
Windows platform, and increase its product development costs. The availability of licenses related to
protocols and file formats may enable competitors to develop software products that better mimic the
functionality of Microsoft products which could hamper sales of the company’s products.

The company’s products and online services offerings, including new technologies are subject to
government regulation in some jurisdictions, including in areas of user privacy, telecommunications, data
protection, and online content. The application of these laws and regulations to Microsoft’s business is
often unclear, subject to change over time, and sometimes may conflict from jurisdiction to jurisdiction.
Additionally, compliance with these types of regulation may involve significant costs or require changes in
products or business practices that result in reduced revenue. High regulations on the company may
have an adverse impact on the company’s results of operations.

Intense Competition

Microsoft faces intense competition across all markets for its products and services. The company’s
competitors range in size from Fortune 100 companies to small, specialized single-product businesses
and open source community-based projects.
In the Productivity and Business Processes segment, the company competes with software and global
application vendors such as Adobe Systems, Apple, Cisco Systems, Facebook, Google, IBM, Oracle,
SAP, and web-based and mobile application competitors as well as local application developers in Asia
and Europe. Skype for Business and Skype competes with instant messaging, voice, and video
communication providers, ranging from start-ups to established enterprises. Web-based offerings

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competing with individual applications that have positioned themselves as alternatives to Microsoft’s
products. The company’s Dynamics products compete with vendors such as Oracle and SAP in the
market for large organizations and divisions of global enterprises. In the market focused on providing
solutions for small and mid-sized businesses, the company’s Dynamics products compete with vendors
such as Infor, The Sage Group, and NetSuite. Salesforce.com’s cloud CRM offerings compete directly
with Dynamics CRM on-premises and CRM Online offerings.

Microsoft’s server products face competition from various server operating systems and applications
offered by companies, including Hewlett-Packard, IBM, and Oracle with a range of market approaches. Its
web application platform software competes with open source software such as Apache, Linux, MySQL,
and PHP. In middleware, the company competes against Java vendors. The company’s database,
business intelligence, and data warehousing solutions offerings compete with products from IBM, Oracle,
SAP, and other companies. System management solutions compete with server management and server
virtualization platform providers, such as BMC, CA Technologies, Hewlett-Packard, IBM, and VMware. Its
products for software developers compete against offerings from Adobe, IBM, Oracle, and other
companies. Azure faces diverse competition from companies such as Amazon, Google, IBM, Oracle,
Salesforce.com, VMware, and open source offerings. The Windows operating system faces competition
from various software products and from alternative platforms and devices, mainly from Apple and
Google. Microsoft’s search advertising business competes with Google and websites, social platforms like
Facebook, and portals that provide content and online offerings to end users.

Growing competitive pressures may impact the company’s market share and margins in near term.

Microsoft Corporation

Top Competitors

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Top Competitors

TOP COMPETITORS

The following companies are the major competitors of Microsoft Corporation

Adobe Systems Incorporated
Amazon.com, Inc.
BMC Software, Inc.
CA, Inc.
Cisco Systems, Inc.
Facebook, Inc.
Hewlett Packard Enterprise Company
International Business Machines Corporation
Nintendo Co., Ltd.
Oracle Corporation
RED HAT, INC.
salesforce.com, inc.
Samsung Electronics Co., Ltd.
Sony Corporation
The Sage Group plc
VMware, Inc.
Yahoo! Inc.

apple

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Company View
COMPANY VIEW
A statement by Satya Nadella, the Chief Executive Officer at Microsoft Corporation, is given below. The
statement has been taken from the company’s 2016 annual report.
Dear shareholders, customers, partners, and employees:
I’m proud of the progress we’ve made as a company this past year and excited about the opportunity for
even more progress in the year ahead. We’ve advanced our mission to empower every person and every
organization on the planet to achieve more. We’ve continued to cultivate a Microsoft culture in which
people connect their individual energies and passions for technology to this mission. We’re leading
profound digital transformation both for people and institutions. We’ve achieved strong financial results.
And we’re building a sturdy foundation for an even brighter future.
We generated $85.3 billion in revenue, $52.5 billion in gross margin, and $20.2 billion in operating income
this past fiscal year. Adjusting for Windows 10 revenue deferrals and impairment, integration and
restructuring expenses, revenue was $92.0 billion with $27.9 billion in operating income. Even as we
invested in innovation and expanded geographically, we maintained our commitment to shareholder
return and increased our total cash return to $26.1 billion, up 12 percent from last fiscal year. These
results reflect exciting new product innovations as well as increases in customer usage and engagement
across our businesses:
Commercial cloud annualized revenue run rate exceeded $12.1 billion, up more than 50 percent year-
over-year.
More than 70 million people use Office 365 commercial every single month.
Revenue from our cloud platform, Azure, grew triple digits, with usage of key computing and database
workloads more than doubling year-over-year.
Windows 10 is now active on more than 400 million devices around the world and over 197 billion hours
of usage. This is the fastest adoption rate of any prior Windows release.
Bing has leveraged this incredible usage to become profitable with search advertising revenue up 17
percent, excluding traffic acquisition costs.
Xbox Live monthly active users grew 33 percent year-over-year to 49 million.
Over the past year, Microsoft has built momentum in each of its reportable segments, which is detailed
below, but it’s the larger opportunity – how technology can inspire and ignite change and renewal – that I
want to emphasize in this year’s letter.
A transformational opportunity
Microsoft is uniquely positioned in this era of massive business and societal transformation. We’re the
company that cares most deeply about computing technologies for both people and the organizations

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they build. Our entire purpose is to make things that help our customers make things — and make things
happen. We build the platforms upon which others build digital platforms. After all, each of us, as
individuals, is trying to build something that outlasts ourselves, whether that’s a small business, a school,
a clinic, or an enterprise.
Over the years Microsoft has experienced great success, and today we are just at the beginning of an
incredible new wave of opportunity. The next generation of ubiquitous computing and ambient intelligence
is going to transform every life, every industry, and every country.
What this means for organizations is that Microsoft is their partner in digital transformation – engaging
customers, empowering employees, optimizing operations, and transforming products. What it means for
people is that Microsoft helps them get more out of every moment – creating, collaborating, learning,
gaming, being mobile, and staying secure.
Let’s look at how we’re doing this within each segment.
Productivity and Business Processes
Productivity is in our DNA, and so everything we do supports our customers’ digital work and life.
Nowhere is digital transformation more evident than how we live and work today. We work on the go. We
are on more teams, both inside and outside the company. We don’t have time for the information we need
personally and professionally to live in different silos.
We’re not simply building individual tools, but rather designing an intelligent fabric based on four
principles – collaboration, mobility, intelligence, and trust. People still do important work as individuals,
but collaboration is the new norm, so we build our tools to empower teams. We aspire to help everyone
be productive no matter where they are, regardless of the device they use. Your data, apps, and settings
– all of your content – roam with you across your computing experiences. Intelligence is an amazing force
multiplier. To be successful amid the explosion of data, people need analytics, services, and agents that
use intelligence to help them manage their scarcest resource – time. Finally, trust is the foundation upon
which everything we do is built. That’s why we are investing deeply in security and compliance that set
the standard for enterprise-grade productivity.
The two pillars of this ambition are Office 365 and Dynamics 365.
Office 365 is changing the nature of work for individuals and teams. Customers love the power of Office
on Windows and Mac as well as their iOS and Android mobile devices. In fact, Office is on more than 50
million iOS and Android monthly active devices, up more than four times over last year. Industry analyst
surveys report that in cloud email, Microsoft is the clear choice. And we continue to see great momentum
as innovative companies like GE, Facebook, Hershey, and Discovery Communications adopt Office 365.
We recently launched Dynamics 365 to empower business users with built-in insights and intelligence,
accessed from within the business applications they’re working on – cloud-based apps like field service,
sales, finance, and operations. It is deeply integrated with Office 365 to bring together all of the
capabilities people need to get their jobs done. Business process tools in the past were hostage to silos
of information and monolithic suites of applications. We’re removing those impedances by bringing

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together communications and collaboration capabilities so they work seamlessly for every role. Overall,
Dynamics 365 builds on a strong base of nearly 10 million monthly paid seats, up more than 20 percent
year-over-year. And in this past year, we saw Dynamics CRM Online seat additions more than double
year-over-year, driving overall Dynamics revenue growth.
This year Microsoft and LinkedIn announced our agreement to join forces to connect the world’s
professional cloud and the world’s professional network – creating new experiences and new value for
users. Together we will have a transformative effect through our shared ambition to reinvent ways for
professionals to be more productive. With more than 1.2 billion Office users and 433 million LinkedIn
members, our combined data graphs will forever change how Sales, HR, and other professionals get
work done. Meetings will get better when Cortana can draw on your professional network to connect the
dots so you stay one step ahead. Your online newsfeed will become more intelligent as the professional
cloud and network tailor information to what’s going on at work, upcoming meetings, and projects
underway. This acquisition will grow our total addressable market by creating a vibrant network that
brings together a professional’s information in LinkedIn’s public network with the information created in
Office 365 and Dynamics 365.
Looking ahead, our vision is to teach human language to all of the computing experiences that surround
us. We imagine a world in which a deeply personal agent understands you, your organization, and your
world, helping you get more out of every moment. Skype and Outlook with their hundreds of millions of
users already are conversational canvases that will increasingly become rich platforms for getting every
task done with new applications in the form of bots.
Intelligent Cloud
Our ambition to build the intelligent cloud is closely linked with the previous ambition. In fact, together with
cloud-based applications like Office 365 and Dynamics 365, we are on track to achieve $20 billion in
commercial cloud annualized revenue run rate in fiscal year 2018.
Every organization needs new cloud-based infrastructure and applications that can convert vast amounts
of data into predictive and analytical power through the use of advanced machine learning, analytics, and
cognitive services. The combination of Azure’s infrastructure and data services makes it possible for
businesses to build digital transformation applications that better engage customers, optimize operations,
and transform products and business models.
From an infrastructure perspective, we’ve continued to deliver on the promise of a global, hyperscale
cloud platform with 30 unique Azure regions around the world. For perspective, we cover more countries
and regions than any other cloud provider, from North America, to Asia, to Europe, to Latin America.
We’re continuing to invest billions of dollars each year to build out more and more infrastructure. What
this means for our customers is that they can scale their solutions without worrying about their cloud
platform’s capacity or the complex demands of transparency, reliability, security, privacy, and compliance.
In essence, we’re meeting their real-world needs both for today and tomorrow.
The Microsoft Cloud is open and offers choice. We broadly support a wide range of platforms and
developer tools on Azure. Our acquisition of Xamarin, and our work with Red Hat, Docker, Mesosphere,
and others reflect our commitment to working cross-platform. Nearly a third of customer virtual machines

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on Azure run Linux.
We are building our server products to become the edge of our cloud, supporting true hybrid computing.
SQL Server 2016, Windows Server 2016, and System Center 2016 as well as Azure Stack enable
customers to build a cloud platform that spans their own data centers and the public cloud.
Revenue within the Intelligent Cloud segment alone increased $1.3 billion, or 6 percent, driven in part by
impressive gains in our Azure business. Azure revenue and usage grew by more than 100 percent in the
final quarter of the year. More than 70 percent of the Fortune 500 have at least two different Microsoft
Cloud offerings. And more than 80 percent of the world’s largest banks are Azure customers. We clearly
are now one of the two enterprise cloud leaders.
It’s not just infrastructure driving this growth, but also the intelligence we infuse into applications.
Customers such as Boeing, Jabil Circuit, and Land O’Lakes are using Microsoft’s industry-leading data
management, machine learning, analytics, and cognitive services to infuse intelligence into their
applications. The integration of cloud-based cognitive services like Cortana is just the tip of the spear, and
will fuel our vision for conversation as a platform. We have more than 20 cognitive services APIs today,
including for vision, speech, text, recommendations, and face and emotion detection. Developers use
these APIs within their applications to augment users’ experiences by enabling solutions to see, hear,
speak, and interpret the world around them. Our intelligent cloud is democratizing these capabilities for
startups, small businesses, and enterprises alike.
More Personal Computing
Just as we are transforming business and society through cloud computing, we’re also revolutionizing the
workplace to help organizations be more productive, and people do more. This was the year of
reinventing Windows and delivering a renewed vision of one of the world’s most successful operating
systems. We launched Windows 10 with a new concept – to enable Windows as a service, continuously
delivering differentiated value across our ecosystem to better serve the needs of our customers. We
engineered Windows 10 to enable innovative and more natural ways to interact and engage with devices
– ask a question with your voice, draw with the flick of a pen, and secure your most important things with
a smile or a touch. These experiences place users at the center so they can move seamlessly across all
devices – from the PC, Xbox, phones, and Surface Hub, to mixed reality with Microsoft HoloLens and
Windows Holographic.
With an installed base of more than 1 billion Windows devices – more than 400 million of which are
already on Windows 10 and its 197 billion hours of usage – we have an opportunity to offer new
experiences and deepen our engagement with Windows users. We see opportunities to innovate and
grow in areas such as productivity and gaming, bringing these experiences to every device. And we
continue to inspire new, innovative device categories like the two-in-one Surface, the pioneering
HoloLens, and over 1,500 new Windows devices designed with our OEM partners.
Led by state-of-the-art security, Windows 10 is starting to drive digital transformation for customers in the
enterprise. The U.S. Department of Defense and Accenture are just a few of the customers deploying
Windows 10 to millions of employees to help protect them with industry-leading security features like
Credential Guard, Device Guard, Windows Hello, and new cloud-based security services like Windows

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Defender Advanced Threat Protection. Our belief in building world-class enterprise security in Windows
has contributed to nearly every one of our enterprise customers piloting Windows 10 this past fiscal year.
Windows is also built to support everyday experiences for everyone. Cortana – the first truly personal
digital assistant — came to life in Windows 10. Embedded within Windows 10, Cortana gets to know each
user, helping to get things done, to organize schedules, respond to questions – all through natural user
interaction. And by learning more about the user over time, Cortana becomes increasingly useful every
day. The Windows 10 Cortana search box has over 126 million monthly active users, and has been asked
12 billion questions to date. In turn, this intensity and frequency of usage helped drive Bing’s U.S. PC
query share to nearly 22 percent in the final quarter of our past fiscal year.
Gaming is another area where Windows 10 will open new user experiences and scenarios. Gaming has
been among the leading drivers of engagement on Windows 10, with more than 17.5 billion hours of
gameplay on Windows 10 PCs in its first year. Xbox Live is connecting fans across Windows 10, iOS, and
Android. Microsoft has an incredibly engaged gaming audience on Xbox Live with 49 million monthly
users and growing – up 33 percent year-over-year. This growth is driven in part by strong franchises like
Minecraft, which has sold more than 106 million copies to date. In fact, Xbox Live players of Minecraft
increased 62 percent in the last year. Our gaming roadmap over the next 18 months is anchored by two
significant console releases – Xbox One S and Project Scorpio – and investments in growth areas such
as virtual reality, video, and eSports.
We continue to grow the Windows ecosystem by creating new computing categories. Surface, Surface
Hub, and Microsoft HoloLens have pushed the boundaries of how personal the computing experience can
be, with Surface Book and Surface Pro 4 released in the last year. Forward-looking customers like Rolls
Royce, the PGA Tour, Japan Airlines, and Volvo already are embracing Microsoft HoloLens and the
Windows Holographic platform, transforming the way they work by breaking down the barriers between
virtual and physical reality. We are excited about these future growth areas but are also committed to
ensuring that we are investing thoughtfully across our portfolio. Over the past fiscal year, we increased
investment in key capabilities within Windows 10 and in new growth markets, while at the same time
scaling back our investment commensurate with the opportunity in areas like phone.
Across each of these ambitions, Microsoft made significant progress this past year. And we’re investing in
a future that is even more exciting.
Investing in the Future
Earlier in this letter I described the transformational opportunities that lie ahead, particularly in the realm
of digital intelligence. We’re growing today’s core businesses and technologies, incubating for the future
and investing in long-term computing breakthroughs. Within our research labs we’re hard at work on
advanced machine learning – artificial intelligence – that will produce forewarnings that can put an end to
distracted driving and one day identify a crisis like Zika before it happens. Quantum computing, theorized
for decades by some of the world’s greatest minds as a way to harness the very building blocks of matter
and energy for unimaginable computing capabilities and intelligence, is emerging today as a feasible
technology. Its realization will bring new power to cure disease and address global challenges like climate
change. Our people and partners right now are solving the hard problems of experimental and theoretical
physics, mathematics, and computer science that will accelerate quantum computing’s becoming a

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reality.
And that brings us right back to our mission – to empower every person and every organization on the
planet to achieve more.
Computing and societal impact
Last year I concluded this letter committing that we would continue to ask ourselves what are the
challenges humankind faces, how can technology help, and what is the contribution of Microsoft? To me,
these questions are essential to the rediscovery of the soul of Microsoft, and more broadly, the purpose of
global companies in society. This past year we’ve witnessed movements that understandably question
globalization and its impact on economic equality. With worldwide per capita GDP and productivity growth
at roughly 1 percent, how do we return to vigorous growth that benefits everyone? That’s part of what
we’re working to address both through our core business and through our broader work societally,
including this past year with the founding of Microsoft Philanthropies.
When I meet with leaders in every part of the world, I hear their desire to work with Microsoft to create
world class, cloud-enabled platforms, and applications that advance health, education, and economic
growth, locally in their countries and communities. That is what inspires me most. And it’s why we are
working with public and private sector partners to promote a public cloud for public good – expanding
affordable internet connectivity, building next generation skills, and fostering policies that promote
trustworthy computing in the cloud. This past year we announced that Microsoft Philanthropies will donate
$1 billion in public cloud computing for nonprofits around the world.
Throughout our discussions with LinkedIn this year, I was struck in my conversations with founder Reid
Hoffman and CEO Jeff Weiner that we share a commitment to more directly and more evenly spread
opportunity for everyone. In fact, LinkedIn’s vision has been to create economic opportunity for every
member of the global workforce—all 3 billion of them—by building the world’s first economic graph, a
digital representation of the global economy and opportunity. The goal is to make labor markets work
better for everyone by making them more efficient and open. Together we aspire to help everyone
navigate an increasingly challenging global economy more effectively.
In conclusion, the test of any brand is its ability to have measurable impact and to remain relevant over
time. Microsoft has done this in times of transition by innovating boldly. When I walk the hallways of
Microsoft and talk with our talented people, the sense of purpose and urgency in realizing our mission
through world class innovation is unmistakable.

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Locations And Subsidiaries
LOCATIONS AND SUBSIDIARIES
Head Office
Microsoft Corporation
1 Microsoft Way
REDMOND
Washington
REDMOND
Washington
USA
Phone:1 425 8828080
Fax:1 425 7067329
www.microsoft.comen-us
Other Locations and Subsidiaries
Maluuba Inc
Suite 1400
2000 McGill College Avenue
Montreal
Quebec
Montreal
Quebec
CAN
www.maluuba.com
Microsoft – Auckland Office
Level 5
22 Viaduct Harbour Avenue
Auckland
NZL
Phone:64 9 362 5800
Fax:64 9 357 0868
Microsoft (China) Co., Ltd
19/F, Millennium Tower
38 Xiaoyun Road
Chaoyang
Beijing
Chaoyang
Beijing
CHN
Phone:86 10 84538989
Fax:86 10 84538509
Microsoft Canada Inc.
1950 Meadowvale Blvd
Mississauga
Ontario L5N 8L9
CAN
Phone:1 905 568 0434
Fax:1 905 568 1527
Microsoft Corporation (I) Pvt., Ltd.
Prestige Takt
No.23 Kasturba Road Cross
Bangalore
Karnataka
Bangalore
Karnataka
Microsoft Egypt
Smart Village
Kilo 28 Cairo/Alex Desert Road
Abou Rawash
Cairo
EGY
Phone:202 16880

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IND
Phone:91 80 22121212
Fax:91 80 22121000
www.microsoft.com/india/msindia
Fax:202 35390303
Microsoft France
18 Avenue du Québec
Zone de Courtaboeuf 1
Courtaboeuf Cedex
FRA
Phone:33 825 827 829
Fax:33 164 46 06 60
Microsoft Informatica Ltda.
Av. Nacoes Unidas 12.901 Torre
Norte 27º andar
04578-000 – Sao Paulo
BRA
Phone:55 11 5504 2155
Fax:55 11 5504 2227
Microsoft Korea Inc.
6th Floor, POSCO Center
892 Daechi-Dong, Kangnam-Gu
Seoul
Seoul
KOR
Phone:82 – 25314500
www.microsoft.com/korea
Microsoft Pty. Limited
1 Epping Road
North Ryde
Sydney
Sydney
AUS
Phone:61 2 9870
Fax:61 2 9870
www.microsoft.com/en-au
Microsoft Singapore Pte. Ltd.
1 Marina Boulevard
22-01 One Marina Boulevard
Singapore 018989
SGP
Phone:65 6882 8899
Fax:65 6882 8866

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United States – Software 0072 – 0381 – 2015

MarketLine

Industry Profile

Software in the
United States
June 2016

Reference Code: 0072-0381

Publication Date: June 2016

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United States – Software 0072 – 0381 – 2015

EXECUTIVE SUMMARY

Market value
The United States software market grew by 5.5% in 2015 to reach a value of $96.6 billion.

Market value forecast
In 2020, the United States software market is forecast to have a value of $139.4 billion, an increase of 44.3% since 2015.

Category segmentation
Software infrastructure is the largest segment of the software market in the United States, accounting for 46.8% of the

market’s total value.

Geography segmentation
The United States accounts for 29.2% of the global software market value.

Market rivalry

Competition within the software market is boosted by constant advances in technology, by the presence of large

international incumbents and a regular supply of new entrants with alternative business models forcing players to