Why Microsoft Is Poised To Become the World’s Most Valuable Tech Company

Having defied all odds and silenced the experts that the deal was dead on arrival in Britain, Microsoft completed its $69 billion purchase of Activision Blizzard in October 2023.

It secured approval from 16 different governments including the Federal Trade Commission, The European Commission, and Britain’s Competition and Markets Authority who were all operating under the assumption that the merger would stifle competition in the video game industry.

In what will play out to be a relatively minor concession in the long haul, Microsoft agreed to allow Nintendo and Sony to keep Activision’s most lucrative game, Call of Duty, available for their platforms now that it owns Xbox.

Microsoft’s Relentless Pursuit Of Growth

Determined and wealthy enough to fight regulators with the best legal minds money can buy, Microsoft has positioned itself to become the world’s most valuable tech company after a decade of deal-making.

The sheer volume of companies and capital that Microsoft has invested in its bid for uninterrupted growth in such a compressed timeline is breathtaking: 326 deals worth over $170 billion since 2014, per Dealogic, making Microsoft the industry’s most aggressive consolidator.

Name Brand Marquee Of Strategic Acquisitions

The impressive lineup of coups includes LinkedIn, GitHub, and Nuance Communications. All of these deals have advanced Micosoft’s position in highly valuable growth markets, especially in AI and Cloud computing. 

With 400 million members, 9 million company pages, strong enterprise relationships, and revenue-generating sales channels, LinkedIn is helping Microsoft attract new clients.

The acquisition makes Microsoft a leader in offering bundled services including cloud infrastructure, customer relationship management (CRM), Enterprise Resource Planning (ERP), and Office 365.

Meanwhile, Microsoft’s $7.5 billion acquisition of GitHub gives it instant access to 100 million developers who are dependent on GitHub’s code repository products. It is successfully guiding them into the Microsoft developer environment, where the real money is made.

But that’s just the beginning. Microsoft’s acquisition of Nuance Communications has significantly advanced its capabilities in AI as Nuance Communications is a global leader in the space and has a strong presence across industries including healthcare, financial services, retail, and telecommunications. This will accelerate Microsoft’s industry-specific cloud strategy to transform the future of work and healthcare.

Nuance’s deep vertical expertise with Microsoft’s global cloud ecosystems will enable faster innovation and deployment of solutions.

The Lion Tamer 

But the clincher in this acquisition-fueled spree to market leadership is the partnership stake that it bought from ChatGPT-maker OpenAI for $10 billion in January 2023 which tied it to the company without attracting the same level of attention from regulators as an outright acquisition.

With the Activision deal done, MS is now free to focus on AI and cloud computing. Despite all the attention the Activision deal brought to Xbox’s place in the video game industry, console gaming is a trojan horse for Microsoft.

Sound And Fury About Xbox Signifies Nothing 

The strategy behind the acquisition is really about going all in on cloud gaming as the dedicated console hardware piece is on its way out because more and more people play games through phones and TVs now.

While it’s difficult to assess the performance of each individual acquisition, it’s worth noting that Microsoft’s overall performance has been strong.

Microsoft shares were 417% higher for the decade, indicating that the strategic acquisitions and other business decisions have contributed to its success.

Microsoft has demonstrated that it is fearless about making bold strategic moves to acquire new markets and technologies, even if it means facing brutal regulatory hurdles and public scrutiny.

By investing in a diverse portfolio of companies and products, Microsoft has positioned itself as a leader in the fields of AI, cloud computing, and gaming. With its loyal customer base and innovative culture, Microsoft is poised to become the world’s most valuable tech company.

SWOT Report is now Business Intelligence Weekly. The creator and journalist behind the digital publication, Andrew Ellenberg, is President & Managing Partner of Rise Integrated, an innovative studio that creates, produces, and distributes original multimedia content across digital touchpoints. To submit story ideas or ask about custom multimedia publishing, call 816-506-1257, email [email protected], or read more of his work in Forbes. To learn about his company check out this profile story.

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