Microsoft can flip the antitrust script

[devikad]

Microsoft can flip the antitrust script


Microsoft took its antitrust lumps in the 1990s - and that might be playing to its favor now. The software giant has been on a little acquisition spree lately as other Big Tech competitors are relegated to the sidelines. With revenue jumping 12% in the first quarter compared with the same quarter last year, in part helped by the pandemic, the $1.6 trillion company can take advantage of its competitors being distracted by D.C.

Microsoft had another strong quarter driven by cloud computing. Revenue in its Azure division grew by nearly 50% in the quarter that ended Sept. 30, helping Satya Nadella's firm beat analyst expectations as net income surged by 30% from a year earlier. Microsoft is now the No. 2 player in the cloud sector, behind Amazon.com and ahead of Google, which was just sued by the Justice Department.

Meantime these competitors are distracted by a recent congressional report that accused them, Facebook and Apple of antitrust behaviors not unlike those that Microsoft fought off some 25 years ago. Then the DOJ charged the firm co-founded by Bill Gates of using its monopoly power in computer operating systems to illegally bundle its Internet Explorer browser. In a settlement, Microsoft agreed to limit the conditions it imposed on computer makers and share interfaces with software developers.

And yet Washington's relative complacence now with Microsoft has opened the door to deal after deal. In September, Microsoft doled out $7.5 billion for ZeniMax Media, the owner of popular games like "Doom" and "Fallout." In June, Microsoft acquired data-modeling firm ADRM Software to support its cloud offerings. In the fiscal year that ended June 30, Microsoft said it acquired 15 companies worth a total of $2.4 billion. And the firm even tried its hand bidding on Chinese-owned TikTok before dropping out of the running.

With $138 billion in cash, it can afford to buy a lot more, giving it an M&A advantage. The owner of video-game console Xbox is competing with Apple, Alphabet and others in the gaming business which has been made even more popular by pandemic-induced lockdowns. Xbox revenue was up by 30% last quarter compared to the previous year.

Dealing with Washington is time-consuming and the spotlight can hurt a company in a myriad of ways. Its distractions decades ago led Microsoft to fall behind the competition for mobile phone operating systems and its once dominant internet browser. This time with the D.C. target on rivals' backs, Microsoft is free to focus on growth.

Source: https://cio.economictimes.indiatimes.com/news/corporate-news/microsoft-can-flip-the-antitrust-script/78903879