Microsoft crushes earnings — now it's ready to crush an unlikely competitor

Friday, May 1, 2020 by Robinhood Snacks |
Microsoft to Zoom: "You are not enough"

Microsoft to Zoom: "You are not enough"

Don't call it soft... The world's most valuable publicly-traded company, Microsoft, just revealed extra strong quarterly earnings. Success in its high-flying cloud biz offset corona-related losses (like interruption of Surface laptop/tablet production). The OG software star seemed to barely feel any pandemic business pain at all. Au contraire...

  • Sales jumped 15% to $35B and profits came in at a thick $11B — that's 22% more profit than what Microsoft squeezed out of the same quarter last year.

Just crushed earnings, BRB... Have to go crush my rival now. Microsoft’s remote workplace tool, Teams, has been referred to as a less-sexy version of Slack. But Teams DGAFs because its daily users jumped 70% from 44M in mid-March to 75M today. On 1 day in April, a whopping 200M people were logged into Teams. And Teams' new enemy isn't Slack... it's Zoom:

  • “Teams is not just about having lots and lots of video meetings...” it's about "actually getting work done where meetings and video is one part" — Microsoft's CEO threw down this (not so) subtle shade at Zoom.
  • "Videoconferencing is not enough": What Microsoft wants Zoom to know — Teams offers video, but also a bunch of other collab functions.

"One & Only" companies have weaknesses... "One & Only" companies like Zoom do just 1 thing really well. But a "One & Many" company like Microsoft can offer better integration with its existing products (think Word/Excel/PowerPoint and a broader suite of services to scale. Unless a company is a just-born young startup, it's more likely to go with a familiar option like Microsoft long-term over Zoom's single-product.