14 DAY TRIAL // Microsoft took over all of its rivals, including Cupertino-based Apple, to become the world’s most valuable company last year, but despite this historic achievement, CEO Satya Nadella says there’s no reason to throw a party.
Speaking at the company’s headquarters this week, Nadella explained that Microsoft becoming the leading company in terms of market cap wasn’t really a priority for him, pointing out that such an accomplishment doesn’t typically last too long because “it’s not stable.”
“I'm not one of those guys who says, 'let's celebrate some market cap measure.' That's not just stable,” he was quoted as saying by BI.
Amazon now at the top of the pack
And he’s right. Earlier this month, Amazon managed to overtake Microsoft to become the world’s most valuable company as well, with the software giant now the runner-up, just ahead of Google parent company Alphabet and Apple.
“Our business model is about creating more surplus outside us. We will only be long-term success when the people are making more money around us,” Nadella continued.
“As a guy who grew up in a country that was colonized by multi-nationals without necessarily contributing, I'm always cognizant of that — this thing about showing up and saying I collect rent and no local contribution.”
But despite Nadella highlighting that Microsoft doesn’t consider the market cap a sign of success, becoming the world’s most valuable company confirms that the increasing focus on cloud is working. Since Nadella replaced Steve Ballmer at the helm of the firm, Microsoft has been more about cloud services than ever before, while at the same time investing in productivity solutions, like Office 365.
This strategy is paying off, and while Nadella is right and such measures aren’t stable, Microsoft continues to be at the top of the industry. And right now, analysts believe Microsoft is well positioned to become the next trillion-dollar company, most likely by the end of 2020.