We reported yesterday that Microsoft’s share price has been more resilient than most in the face of the coronavirus crisis and the recession associated with the economic shutdown it has required.
Today Microsoft CEO Satya Nadella confirmed Microsoft was well-positioned to weather the storm, saying:
“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.”
Microsoft has even seen increased demand for its products, such as a massive increase in Microsoft Teams usage.
“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.
Microsoft’s subscription business like Office 365 and Microsoft 365 is, of course, less affected by economic cycles, leaving Microsoft better prepared than they were in 2008.
Microsoft’s hardware sales are more vulnerable, despite the supply side improving now China has come out of lockdown.
“On the supply side we are getting back on rails,” Nadella told CNBC’s Jon Fortt when asked about whether Microsoft would be able to deliver the new Surface devices and a revamped Xbox gaming console.
It remains to be seen of course if customers will be there for the new generation products, given the expectation for economic hardships.
Despite expected to be less affected by the crisis, Microsoft still supported economic support measures for smaller companies less fortunate.
“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.”
via the WC