Microsoft Corporation (MSFT) May Have Some Future Growth

As we all know, Microsoft Corporation (NASDAQ:MSFT) has been a stagnant stock for a very long time. The return for Microsoft Corporation (NASDAQ:MSFT) over the past 5 years has been a 31% increase in share price. During the same time the Dow Jones has gone up 44%. But despite that, picking almost any other technology stock would have yielded higher return during that time period. The good news going forward is that the stock price for Microsoft has gapped up, and I think it’s due to one reason. The reason being that Microsoft has a big chance of gaining traction as a cloud play in the market.

Microsoft in the cloud

Don’t get me wrong Microsoft Corporation (NASDAQ:MSFT) does well in its other divisions, but the cloud seems like it will be a huge market. So what is the cloud? And why is it important for Microsoft? The cloud is a network of servers on the internet to store, manage, and process data instead of using a local server. The cloud market is estimated to be around $2 trillion dollars or more, and the revolution is just starting. One of the executives of Microsoft, the President of Server and Tools, states that Microsoft already has a huge grip on cloud computing with Office365/Azure platforms.

Partnership made in heaven

It seems that Microsoft Corporation (NASDAQ:MSFT) is doing okay for starting off in the cloud, but I guess sometimes even the biggest of tech companies need assistance from one another. Microsoft has decided to partner with Oracle, and it seems both companies can benefit greatly from this partnership.

So how good is this partnership? It has many good aspects that will help both companies generate more revenue with their software. First of all, Oracle’s software/databases will all be able to run on Microsoft’s Azure cloud service. This will generate a lot more new users for Microsoft. Additionally, Microsoft Corporation (NASDAQ:MSFT) will allow fully licensed, and supported Java in its cloud network. Oracle seems to be doing well with cloud as their service has gained an increase in revenue by 50% for the quarter. What’s even more impressive is that Oracle added 500 new customers for the cloud in that same quarter.

The cloud has been nice to Microsoft Corporation (NASDAQ:MSFT) as its risk in investing in the cloud has paid off. One of Microsoft’s cloud products, Office 365, has made annual revenue of $1 billion. Microsoft has a long way to go, but I think that long term investors are now enjoying the climb in stock price. What’s also great is that investors get paid a nice dividend to wait for this cloud computing growth. The dividend given to investors is 2.68% which is not that bad.

Amazon is the main competition

Amazon.com, Inc. (NASDAQ:AMZN) is a huge competitor for cloud computing. So much so that Amazon made $2.1 billion in their web services division, and they are expected to make $6.2 billion by 2014. Also, Amazon.com, Inc. (NASDAQ:AMZN) is already investing heavily into its cloud web services division, putting in $1.4 billion to purchase a Seattle facility for storage.