Whose Income Do You Want to Grow – Yours or Microsoft’s?

Microsoft Closes out their Fiscal Year with Record Bookings

Microsoft recently released their earnings for FY24 Q4 which ended June 30, 2024, showing a growth in revenue and income. As the world’s largest software company, Microsoft has been a powerhouse in delivering computer operating systems, Office suite, cloud computing services, server applications, tablets, and video game consoles. With four out of every 5 Fortune 500 companies using Microsoft Office 365, there is no doubt that they are a tech titan with a far reach.

They are the 800-pound gorilla in the room when it comes to business software and technology, but don’t be afraid, every gorilla has a tummy to tickle too.

Making Money and Paying Dividends

Making money is necessary and ruthless at the same time. All businesses need to bring in revenue to stay afloat and keep the doors open, but they also need to be mindful of how they spend their money. By spending and investing wisely in software assets, businesses can control their costs and save money.

Microsoft published its earnings release for fiscal year 2024 ending June 30, 2024. Revealing that their earnings and income results had all increased as compared to the corresponding period of the last fiscal year:

 Revenue was $245.1B (about $750 per person in the US) and increased 16% (up 15% in constant currency)
Operating income was $109.4B (about $340 per person in the US) and increased 24%, and increased 22% non-GAAP (up 21% in constant currency)
  Net income was $88.1B (about $270 per person in the US) and increased 22%, and increased 20% non-GAAP
   Diluted earnings per share was $11.80 and increased 22%, and increased 20% non-GAA

We don’t disparage Microsoft for having a banner quarter. They are a mega corporation whose goal is to increase earnings to pay out larger dividends to their shareholders, including $8.4B in the form of share repurchases and dividends in the fourth quarter of fiscal year 2024.

Have you thought about the effect that has on you as a customer?

The Effect of Quarterly Earnings on Microsoft Customers

As a business owner, how do you feel when you read this statement from chairman and chief executive officer of Microsoft, Satya Nadella?

“Our strong performance this fiscal year speaks both to our innovation and to the trust customers continue to place in Microsoft,” said Mr. Nadella. “As a platform company, we are focused on meeting the mission-critical needs of our customers across our at-scale platforms today, while also ensuring we lead the AI era.”

To start, it’s positive that Microsoft is seeing an increase in revenue. That could indicate several things including the acquisition of more customers, expanded business opportunities or handling their operational expenses in a more cost-effective and efficient manner.

We agree that investing in technology, such as AI, is imperative in our ever-changing business environment. New technologies take substantial investment to develop and introduce into the market, and that’s extremely difficult for small software development companies to do. We need companies like Microsoft who have thousands of employees and a boatload of funding to bring these technologies to life.

Without revenue generation and technology advancement, customers wouldn’t get new or updated software to enhance their operations. Then, we all lose or end up stalemated.

BUT… These good results also mean that Microsoft is leveraging their customers to the max to generate this strong fiscal performance. Microsoft executives and management aren’t looking out for your best good. They are looking out for their shareholders and themselves – bigger salaries and bonuses.

Do you feel like you’re being taken advantage of by Microsoft?

If you have a gut feeling that you’re being taken advantage of, then you probably are. Now is the time to step up, and not be paralyzed by the size of Microsoft, and take control of the power they wield over your contracts and support agreements.

Think about these four questions:

Am I maximizing my Microsoft 365 subscriptions?

Is my purchasing method flexible and cost-effective?

Can I reduce my spending in the middle of the contract?

Am I paying for the right support, and are there alternatives?

If you answer yes to any of these questions, then it’s time to engage a reputable independent software advisor.

Independent Software Advisory Services

Remend has over two decades of partnering with enterprise, mid-market and government organizations in cutting technology costs. As an independent software advisor, they’re not tied to Microsoft or any other publisher.

Starting with a complementary Remend Savings Analysis, Remend works with clients to assess and analyze their current IT and software needs, identify issues with their current agreements and evaluate what may be needed in the next five to ten years. Then, Remend guides clients in developing a negotiation strategy for their software purchases and service agreements, including information on pricing and terms. This enables you to get the best deal for your operational needs, reduce your Microsoft spending and increase your profit.

Grow your bottom line, instead of Microsoft’s!