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Microsoft’s $440 billion wipeout, and investors angry about OpenAI’s debt, explained (fortune.com)
submitted 9 months ago by to c/technology@lemmy.world
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The immediate catalyst, it seems, is an intensifying focus on capex, or capital expenditures. Microsoft revealed that its spending surged 66% to $37.5 billion in the latest quarter, even as growth in its Azure cloud business cooled slightly. Even more concerning to analysts, however, was a new disclosure that approximately 45% of the company’s $625 billion in remaining performance obligations (RPO)—a key measure of future cloud contracts—is tied directly to OpenAI, the company revealed after reporting earnings Wednesday afternoon. (Microsoft is both a major investor in and a provider of cloud-computing services to OpenAI.)

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[–] 6 points 9 months ago (4 children)

OEM license revenue represents a tiny tiny bit of their financials these days. They could just charge nothing for it and business wise no one probably notice much of a difference.

It is foundational to a lot of what they do, but older devices are just as good for their subscription and tie in revenue. Hell I use my work subscription for office from Linux, complete with OneDrive filesystem synchronization. Microsoft gets all their money from my headcount even as I don't even use Windows.

But that capex could bite them hard if revenue falls to follow from it. That's pretty much the only exposure investors care about.

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  • [–] 7 points 9 months ago* (3 children)

    OEM licensing isn't the important part. It's everything that comes with it. Subscriptions, cloud storage, etc. In my city, a bunch of field workers are being moved from laptops to iPads and phones with the next hardware refresh due to the price jump in laptops. Microsoft won't have integrated Onedrive and SharePoint and full Office Subscriptions for them.

    We already use third-party web apps that aren't Microsoft (and are mostly hosted by AWS) for a lot of their work, so the only Microsoft product they'll have is an email address.

    Us abandoning the Windows laptops costs Microsoft hundreds a year per employee.

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  • [–] 1 point 9 months ago (2 children)

    When someone makes a better version of excel that's cross platform and not solely web based will be the final nail in the Microsoft coffin.

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  • [–] 1 point 9 months ago (1 child)

    Not going to happen unfortunately. There have been so many challengers that have failed to usurp. And the bundling and ecosystem with sharepoint is a) exceptionally useful amd b) anticompetitive. It will take a serious legal case to dislodge excel

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  • [–] 2 points 9 months ago

    I am honestly surprised it never happened. Ma Bell got broken up in 1984, 6 years later Microsoft office is released, like 5 years later it has a dominant stranglehold. So in like a decade all of our consumer anti-trust power went away? Crazy.

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