Microsoft company in the world, with a market cap of over $760 billion – about $15 billion more than Alphabet.
It's not the first time the two companies have competed for the top spot on the list of most valuable companies (the top two spots belong to Apple and Amazon, respectively), but as CNBC, it's the first time Microsoft has taken the lead from Google.
3 main reasons why Microsoft is more valuable than Google
1) The cloud
Microsoft's shift to the cloud is very important and we have seen it manifest in various ways, but perhaps the most significant for the company is Azure.
Microsoft relies on Azure, Amazon's Web Services (AWS) competitor, for years, and its efforts have been justified under the leadership of CEO Satya Nadella, with the company continuously increasing both its customer base and its revenue.
Thanks to new projects such as Project Kinect for Azure, it is certain that this plan will become even more important for the company.
2) The increase in subscriptions
Another one of the most significant changes we have seen from Microsoft is its shift to subscription models for its software and services. In the past, for example, if you wanted to acquire the Microsoft Office suite, you would have had to spend a lot of money before even using it.
Now, thanks to Office 365, consumers and businesses can pay a monthly fee. This proved to be extremely successful for the company. Simple subscribers for Office 365 reached 30.6 million in the last quarter, according to the company's latest earnings report, while business customers hit a record of 135 million.
This subscription strategy does not only concern Office. It also extends to other areas, such as Xbox, where revenue from electronic games increased by 18%, a fact largely due to the growing demand for Xbox software and services.
3) Future plans
The company intends to invest in artificial intelligence and the Internet of Things. Microsoft is making large investments in these areas, which are likely to see massive growth in the future.
