The rise and rise of Microsoft amid a tech meltdown

Microsoft has bucked the trend because it is future-ready, continually building new capabilities

- Howard Yu

Being future-ready is always a work in progress. If you don’t improve, you risk backsliding.

Nothing illustrates this dynamic better than the technology industry in 2022. The entire sector has gone into meltdown since the beginning of the year. The Nasdaq-100 Technology Sector Index has fallen 38 per cent. Companies are talking about layoffs, hiring freezes and delayed initial public offerings. It is a tumultuous time to be in tech.

But not everyone is taking the same hit. I visited Microsoft’s Berlin office just two weeks ago, and I sensed nothing about the looming recession there. Executives spoke about how remote and hybrid work continued to evolve. They focused on what products Microsoft had to ship out.

They worried over cyber-security and its impact on governments around the world. In the news, Microsoft was defending its US$69 billion S$93 billion) acquisition of the gaming giant Activision. It was also taking a 4 per cent stake in the London Stock Exchange as part of a 10-year deal on its cloud computing business.

All this puts Microsoft a world apart from Netflix, Meta and Spotify, which have seen share prices plunge.

MICROSOFT HAS A GAME PLAN

The main reason, on the surface, is that Microsoft is offering a far broader product line. It is also more diversified geographically. The pandemic economy of 2021 lifted all tech companies, not just the giant. Zoom, Peloton and Grab were all surging. But today, a company needs a diversified portfolio to mitigate business risk.