Understanding Microsoft Corp.

Lesson 1 of 3

Software and the cloud business

Microsoft built its early business on packaged software — Windows and Office sold as one-time purchases. Over the past decade it has shifted heavily toward cloud computing through Azure, which rents out computing power, storage, and services to businesses on a pay-as-you-go or subscription basis. Office itself has also moved to a subscription model (Microsoft 365), turning what used to be one-time sales into recurring revenue.

• •Originally built on one-time packaged software sales (Windows, Office).
• •Azure rents cloud computing and storage to businesses.
• •Office has shifted to a subscription model (Microsoft 365).