Key factors that will likely impact Microsoft’s 2Q15 earnings
What to expect from Microsoft's 2Q15 earnings (Part 2 of 11)
Windows 10 OS launched
Windows 10 is Microsoft’s (MSFT) latest operating system. It launched in January 2015. Its success is a key determinant of Microsoft’s platform. Microsoft claims to provide a common platform for PCs, tablets, smartphones, and Xbox. For years, the company generated the majority of its revenue from the operating system upgrade costs. This makes Windows 10’s success even more important for the company’s revenue growth and 2Q15 earnings.
If Microsoft’s Windows 10 is widely accepted, it will benefit Microsoft investors. It will also benefit ETFs—like the Powershares QQQ Trust ETF (QQQ) and the Technology Select Sector SPDR Fund (XLK)—that have high exposure to Microsoft.
Windows 10 versus Windows 8
The Start menu was dropped from Windows 8. It was brought back due to complaints. Windows 10 will continue to have the Start menu. Windows 10 has the Continuum feature. It changes the appearance of the operating system depending on how the customer is trying to interact with it. For example, if customers are using it on a touchscreen, they will see a different interface than if they’re connected with a keyboard and a mouse.
Internet Explorer is available in Windows 10—in the shadow of Spartan. Spartan is a sleek Google (GOOGL) (GOOG) Chrome-style offering that simplifies web browsing. Yahoo (YHOO) is another player in the web browsing space. Microsoft has been losing share to Mozilla Firefox and Google Chrome. It plans to stop losing share with Spartan. Also, the mobile version of the latest OS will be called Windows 10.
New territories and acquisitions
Microsoft wants to accommodate its business. It wants to adapt to the major changes that are underway in computing through acquisitions—including big data, mobility, and the cloud.
Microsoft acquired Equivio and Aorato. Equivio is an eDiscovery or compliance vendor. Aorato is a cyber security company. Later in this series, we’ll discuss these acquisitions in more detail.
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