When the epidemic storm swept the world, many Internet giants were doing big things.
Just as I am greedy when others are afraid, Microsoft's acquisition has always been large-scale and more radical.
After spending $68.7 billion to buy game giant Activision Blizzard, another deal was settled.
Recently, Microsoft officially announced that it has completed the acquisition of nuance communications (hereinafter referred to as "Nuance"), a speech technology company, which cost a total of $19.7 billion (about 125 billion yuan at the current exchange rate).
Image source: Network
If Microsoft's acquisition of Blizzard is an ambition to lay out the metaverse and is looking for a new growth curve, then the acquisition of Nuance, an old voice giant, is actually reinforcing its own moat.
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"Abandoned" voice giants?
First of all, Nuance, Microsoft's target is actually not small.
Founded in 1992, Nuance provides customers with voice transcription, voice interaction software products and supporting developer tools.
Looking back, the moment it came out of the circle was to provide technical support for Apple's Siri voice software. Slowly, Nuance became the leading company in the global intelligent voice field, according to the "Global Voice Assistant Application Market Research Report 2021-2027", the top five companies in the global voice assistant application market are: Nuance Communications, Amazon .com, Inc., Google LLC, Microsoft Corporation, Apple Inc.
However, as the potential of the intelligent voice market is further explored, Internet giants are looking at the development space behind this, and public data shows that the scale of the voice economy is expected to reach $1 trillion in 2025, surpassing the mobile application economy. Among them, it is estimated that by 2022, the scale of China's intelligent voice solution form business will reach 10.6 billion yuan, and the scale of technology platform output form business will reach 4.05 billion yuan.
So, they began to team up, began to develop their own voice technology, tried to overtake in curves, and to some extent impacted Nuance's market position.
As Nuance's competitiveness continues to be weakened, the company also wants to transform itself to save itself, but with little success, based on this dilemma, being acquired by Microsoft may also be another way to choose the best.
2
It's all about cloud computing
As we all know, once stuck in its own way, Microsoft did not seize the dividends of the mobile Internet, and fell into a state of twilight for a time, when people already thought that Microsoft was no longer young, difficult to attract the attention of fresh blood, and lacked growth.
Fortunately, it is fortunate that Microsoft later reacted, launched cloud computing, and successfully transformed, and there was a clear trend of rejuvenation.
Especially during the epidemic period, cloud computing has been more sought after by the market, and the growth of this piece of business has brought obvious boosts to the company's performance.
Looking at Microsoft's stock price performance, although the Federal Reserve has released hawkish signals successively, the loose environment or narrowing, the US stock market is in a certain adjustment period, especially making many large technology companies under obvious pressure, the stock price has fallen across the board, Microsoft has fallen from last year's high point ($348.946), fell to $276.44, the latest total market value of $2.072 trillion, but under this adjustment, Microsoft's performance in large technology stocks is still superior, there is a certain staying power.
Source: Gronhui
In the fiscal second quarter of fiscal 2022, Microsoft achieved operating income of $51.7 billion, an increase of 20% year-on-year; and net profit of $18.8 billion, an increase of 21% year-on-year, which exceeded market expectations overall.
Specifically, Microsoft's core pillar business, the intelligent cloud division, achieved revenue of $18.327 billion, an increase of 25.5% year-on-year; the productivity and business process division, which includes Microsoft's Office suite, achieved revenue of $15.936 billion, an increase of 19.3% year-on-year; and the revenue of the personal computer business (including Windows operating system, advertising, devices and games) totaled $17.465 billion, an increase of 15.5% year-on-year.
Looking at the competitive landscape, in the global cloud infrastructure service provider market, Amazon AWS ranked first in the third quarter of 2021 with a market share of 32%, Microsoft Azure ranked second with a market share of 21%, followed by Google Cloud with a share of 8%.
However, it is worth noting that the revenue of Azure and other cloud services increased by 46% year-on-year, which did not meet market expectations, and to some extent, Azure may face the pressure of revenue slowdown.
In order to further explore the growth space, Microsoft decided to dig deep into six major industries (retail, medical, manufacturing, finance, government and non-profit organizations, and sustainable development) and began to lay out ecological competition.
Among them, for Microsoft, the most direct advantage of acquiring Nuance is not only to improve the level of voice technology, but also to seize opportunities in the field of health care.
Back in 2019, Microsoft and Nuance established a strategic partnership, nuance has begun to focus on the healthcare field in the later stage, through speech recognition and transcription services to achieve the digitization of health records, improve efficiency. With nuance now, the acquisition of Nuance may lead to a new growth driver as the two explore healthcare AI solutions.
In addition to Microsoft's continuous promotion of the acquisition process, in order to strengthen the competitive barriers of cloud computing, Google is not far behind, in recently announced plans to acquire the network security company Mandiant for $5.4 billion, to some extent is also to enhance the advantages of cloud services, in order to face the fiery competition, it can be found that they not only rush to establish a voice in 5G, network security, IOT, but also continue to test the waters in the field of games, want to empower themselves, the competition around cloud computing will only become more and more volumetic.
3
epilogue
In this era, all companies, especially Internet targets, must be constantly chasing growth space, after all, positive growth can bring strong vitality.
Today's Microsoft has less need for Windows, from software to cloud computing, seized its own outlet. But the battle around cloud computing is not so easy to fight, nervous tension is a must, and how to further open the gap with their opponents is the key issue they need to think about at the moment.