Microsoft Corporation (MSFT) Transformation Positive: Bernstein

Microsoft Corporation (NASDAQ: MSFT) investors are worried about who the next CEO of the largest companies in the world of software, as well as the impact of a decline in the PC market activity. But Microsoft Corporation (NASDAQ: MSFT) is used to transform your business enterprise and a subscription model based on the cloud. The company intends to protect your business from office moving to subscription model consumers.

Microsoft moving to the cloud and subscription model

Microsoft Corporation (NASDAQ:MSFT) is moving its desktop Office apps (Word, Excel, PowerPoint, etc.) to a subscription model. And its enterprise data center businesses (SharePoint, Exchange, Azure, etc.) are going to the cloud. That will allow its corporate users to obtain Office across laptop, PCs, desktop and virtualization. Microsoft Corporation (NASDAQ:MSFT)’s decision to shift its datacenter business to the cloud is based on a solid ROI case.

Analyst Mark L. Bernstein Moerdler has estimated that the change of current users of subscription and cloud can generate an additional $ 11 to 21.5 billion of annual sales and 31-78 cents per share in annual earnings. Moving to SharePoint, Exchange and Lync for SaaS, with the up-sell to Office 365 can increase sales by 64-99% and earnings by 15-26 cents. Currently, only a third of small and medium-sized enterprises run Exchange due to the relatively high costs. But the Exchange Online will have a lower cost, making it more affordable for small and medium-sized enterprises.

When you move the application to the subscription model Office desktop can easily add $ 1.5 to $ 4.7 billion Microsoft Corporation (NASDAQ: MSFT) 's annual sales and 31.09 cents to its earnings. According to Bernstein, SQL Server, Windows Azure and (IaaS and PaaS) can add another $ 4.7 to $ 9.5 billion revenue company. According to research firm IDC, the market is expected to IaaS to grow to $ 30 billion and the market for PaaS to $ 3 billion in 2017. If the Redmond company also captures 15-30% of the market, you can easily to generate $ 3.5 to 7,000,000,000 in revenue. These estimates do not include new users or decline of piracy.

Microsoft’s commercial cloud revenue almost doubling

Initial indications show that Microsoft Corporation (NASDAQ:MSFT)’s commercial cloud revenue grew 93% YoY in 2013, and rose 103% in Q1 2014. As users move to a subscription-based model, Office 365 user base surged 135% YoY. Bernstein says that Microsoft Corporation (NASDAQ:MSFT) is expected to provide additional strong positive data when it releases its Q2 earnings on January 23.