Like all industries, big tech has felt the strain under the weight of the COVID-19 pandemic. Earlier this week, it emerged Microsoft has been more robust than most and is the only company now holding a trillion-dollar value. Today, Microsoft CEO Satya Nadella said the company is better placed than most to emerge from the viral outbreak in a good shape.
“We have a great balance sheet, we are a very diverse business, we have a mix of annuity, non-annuity, that is also stronger than even the last time we even went into the financial crisis. I feel confident we’ll come out of this, frankly, pretty strong.”
Of course, it goes without saying that a company the size of Microsoft is better placed than most to weather the COVID-19 storm. But even amongst the elite corporations, Redmond’s diversity in products and foothold in productivity set it apart.
For example, millions of organizations that use Microsoft service on premises may be closed, but many of their employees are working at home and using Microsoft services.
“If this was a previous generation of data centre architectures or software architectures, I don’t think we would have been able to deal with this crisis as effectively as we have been able to,” Nadella said.
Looking Ahead
One of the benefits for Microsoft is its hardware business are a small portion of its revenue drivers. Xbox and Surface will likely be harmed by the COVID-19 outbreak but they don’t dent Microsoft’s bottom end substantially.
“On the supply side we are getting back on rails,” Nadella told CNBC’s Jon Fortt when discussing the company’s ability to launch new Surface products and the Xbox Series X this year.
“I think the government is doing the right thing, which is, they’re focused on the employees who are most impacted and the industries that are most impacted, and small businesses,” Nadella said. “Because those are the parts of the economy that are bearing the burden of this quarantine and staying at home.”
