Microsoft Slowly Becoming a SaaS Company – GuruFocus.com

Microsoft Corp.‘s (NASDAQ:MSFT) valuation has gone up by more than 20% in the last 12 months and the stock price is constantly near 52-week highs. There are several factors behind the new-found momentum of Microsoft stock, including reduced dependency on Windows revenue streams, a surging software-as-a-service portfolio and near triple-digit growth of the company’s infrastructure-as-a-service offering, Microsoft Azure.

One major development in the last six months is the technology giant has decided to put all of its muscle behind its SaaS products, Office 365 and Dynamics 365. Microsoft is in an extremely strong position in the office collaboration market. The company recently announced there are 85 million monthly active Office 365 users around the world. The commercial monthly subscription cost per Office 365 user starts at $5 and goes above $30 for enterprise users, suggesting Microsoft is easily making more than half a billion dollars every month.

The important point to note here is Office commercial revenues have been growing above 50% for the past several quarters, with last quarter numbers coming in at 47%. If there was enough competition in the market, such high growth would

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