Through The Fly's Eyes: Microsoft

from Theflyonthewall.com





Software Giant Continues To Plow Ahead

While Google (GOOG), the new hyper-growth software company was reporting results last night, so was the old giant, Microsoft (MSFT).

The PC-centric company concluded fiscal year 2007 with revenue up 13% and EPS up 18%, not too bad considering the company is approaching its 30th birthday.

What is often forgotten about Microsoft, and powerful from an investment perspective, is its continuing shift away from a licensing model to an annuity or application service provider model. Why this is important is that Microsoft's revenue and earnings should continue to be become more predictable.

The other big positive, which investors tend to forget, is Microsoft is by far the low-cost producer of productivity software in the world on a per PC basis. Especially, in the business market.

From speaking to CIOs and other big buyers of Microsoft product, on the business front, no one can compete on the price side. Also, Microsoft has plenty of power to increase new annuity type agreements modestly and be able to increase revenue nicely for Microsoft.

Microsoft stock has had a nice run so there is no need to rush into the stock, but on stock market corrections, do not forget about this software powerhouse.