Back in 2006 when we first bought Microsoft, the market was concerned about the future of the company’s consumer division – even though it represented only five percent of total sales. We saw great long-term potential for Microsoft to transition its enterprise software business to a subscription-based model, which would generate more predictable revenues.
What makes Microsoft attractive today?
- A successful transition to the cloud continues, and Microsoft’s commercial cloud business now makes up almost 20% of total revenues (up 56% year on year).
- Microsoft continues to aggressively return cash to shareholders through buybacks and dividends.
Peter is the portfolio manager of the Templeton Global Growth Fund (ASX: TGG) and an executive vice president in the Templeton Global Equity Group with research responsibility for banks in Europe, and Asian telecommunications companies.