Microsoft

Microsoft is a software and cloud-platform company whose business spans productivity, enterprise applications, cloud infrastructure, operating systems, developer platforms, security, professional networking, gaming and AI.

The company is easy to misunderstand because several different Microsoft eras still coexist.

Microsoft Corporation ·NASDAQ: MSFT

30-Second Explanation

Windows licensing
still exists

Office
became Microsoft 365 subscriptions

server software
became increasingly cloud-delivered

Azure
became a major infrastructure platform

GitHub
became a developer platform and AI-coding channel

LinkedIn
became a large professional-network business

Xbox
became a content / subscription / platform business

Copilot
is becoming an AI layer across the entire portfolio

Microsoft's commercial strength comes from owning several layers of business computing at the same time.

A single enterprise can pay Microsoft for:

Windows
↓
Microsoft 365
↓
Entra / Defender / Intune / Purview
↓
Dynamics 365
↓
GitHub
↓
Azure infrastructure
↓
Copilot / AI usage

These products reinforce one another because identity, data, developers, cloud infrastructure and employee workflows can live inside the same ecosystem.

In fiscal 2026, Microsoft generated $331.839 billion of revenue. [S1]

Its three reportable segments generated:

Productivity and Business Processes
$139.996B

Intelligent Cloud
$137.791B

More Personal Computing
$54.052B

[S4]

Microsoft Cloud revenue reached $214.4 billion for the year. [S28]

The company's biggest transformation is therefore not that Windows disappeared.

It is that Microsoft moved from depending heavily on periodically sold software licenses toward a business dominated by:

subscription
+
cloud consumption
+
recurring commercial contracts
+
installed-base expansion

AI is now being layered onto that recurring base.

How Microsoft Actually Works

Microsoft can be understood as a set of connected commercial loops.

Enterprise customer loop

EMPLOYEE / ORGANIZATION
↓
IDENTITYEntra
↓
PRODUCTIVITYMicrosoft 365
↓
BUSINESS APPLICATIONSDynamics 365 / Power Platform
↓
SECURITYDefender · Sentinel · Intune · Purview
↓
DEVELOPER / DATA / AIGitHub · Azure · Copilot
↓
MORE WORKLOADS MOVE INTO MICROSOFT↺

Cloud loop

CUSTOMER BUILDS APPLICATION
↓
AZUREcompute · storage · database · networking · AI
↓
USAGE GROWS
↓
CONSUMPTION REVENUE
↓
MICROSOFT BUILDS MORE DATACENTER CAPACITY
↓
MORE SERVICES / MODELS / CAPACITY

Developer loop

developer
↓
GitHub
↓
GitHub Copilot / agents
↓
code
↓
Azure / enterprise deployment
↓
more developer workflow on Microsoft platforms

AI loop

foundation modelsOpenAI · Anthropic · Microsoft MAI · other models
↓
Azure AI infrastructure
↓
Copilot / GitHub / Dynamics / Security
↓
user workflow
↓
seat + consumption monetization

Microsoft is therefore not one product company.

It is a multi-platform company that repeatedly tries to make one customer relationship support additional products.

What Microsoft Does

Sells productivity software as recurring cloud access

Microsoft 365 includes productivity and collaboration applications, cloud services, identity and security components.

The old model was closer to:

buy Office release
↓
use for several years
↓
buy another release

The modern model is:

pay subscription
↓
receive continuous service
↓
renew / expand

Microsoft 365 Commercial products and cloud services generated $101.997 billion in FY2026. [S1]

Operates global cloud infrastructure

Microsoft Azure sells:

  • compute;
  • storage;
  • databases;
  • networking;
  • AI infrastructure;
  • developer services;
  • security;
  • data services.

Azure revenue surpassed $100 billion in FY2026, according to Microsoft's Q4 results. [S2]

The customer may pay based on:

  • reservation;
  • subscription;
  • capacity;
  • consumption.

Operates Windows as a platform and licensing business

Windows still connects Microsoft to:

  • PC manufacturers;
  • enterprises;
  • developers;
  • consumers.

Windows economics include OEM licensing, commercial licensing, devices and a broader platform relationship.

Windows is no longer the center of Microsoft revenue that it once was.

But it remains a major distribution surface.

Sells CRM and ERP business applications

Dynamics 365 provides:

  • sales;
  • customer service;
  • finance;
  • supply chain;
  • operations;
  • business agents.

Dynamics products and cloud services generated $9.006 billion in FY2026. [S1]

Dynamics increasingly connects business-application seats with usage-based AI / agent consumption. [S3]

Operates a developer platform

Microsoft owns GitHub.

GitHub provides:

  • source control;
  • collaboration;
  • Actions;
  • security;
  • enterprise software development;
  • Copilot.

By FY2026 Q4, Microsoft said GitHub had 225 million users, while GitHub Copilot had 50 million users. [S3][S17]

GitHub is not merely an acquisition that added revenue.

It changed Microsoft's relationship with developers and open source.

Operates a professional network

Microsoft owns LinkedIn.

LinkedIn generated $19.817 billion of FY2026 revenue. [S1]

Its business includes:

  • Talent Solutions;
  • Marketing Solutions;
  • Premium Subscriptions;
  • sales / professional tools.

This gives Microsoft a network based on professional identity rather than only software usage.

Sells integrated cybersecurity

Microsoft Security spans:

  • Defender;
  • Entra;
  • Sentinel;
  • Intune;
  • Purview;
  • Security Copilot / security agents.

Security is strategically connected to Microsoft 365, Azure and Windows because Microsoft already sits inside many customer identities, devices and workloads.

Operates gaming platforms and content

Xbox & Game Pass includes:

  • Xbox content and services;
  • Game Pass;
  • console hardware;
  • PC gaming;
  • cloud gaming;
  • owned studios.

The acquisition of Activision Blizzard greatly expanded Microsoft's content portfolio.

Xbox revenue was $21.790 billion in FY2026. [S1]

Builds AI into existing products

Microsoft Copilot is increasingly a cross-product AI layer.

Microsoft's current direction includes:

  • Copilot for work;
  • GitHub Copilot;
  • Security Copilot;
  • Copilot experiences across Windows / Edge;
  • Dynamics agents;
  • a new Copilot app with Home, Code and Autopilot. [S14]

The AI business therefore sits on top of existing distribution.

Products, Platforms & Services

Microsoft 365

Microsoft 365 is Microsoft's productivity and collaboration subscription platform.

Why it exists

To turn Office applications, collaboration, storage, identity and security into a continuously updated cloud relationship.

Commercial role

Large recurring seat base and a major distribution surface for Copilot.

Azure

Microsoft Azure is Microsoft's cloud platform.

Why it exists

Customers need infrastructure and services without owning all underlying computing hardware.

Commercial role

Consumption-based infrastructure, data, platform and AI revenue.

Windows

Windows is Microsoft's operating-system platform.

Why it exists

It provides the software layer connecting PC hardware, applications, users and enterprise management.

Commercial role

OEM / commercial licensing plus strategic distribution.

Dynamics 365

Dynamics 365 is Microsoft's CRM and ERP suite.

Why it exists

Organizations need systems for:

  • sales;
  • service;
  • finance;
  • supply chain;
  • business operations.

Commercial role

Enterprise application seats plus growing agent / usage monetization.

Microsoft Copilot

Microsoft Copilot is a family of AI interfaces, agents and workflows.

Why it exists

Microsoft wants AI to become a new interaction and automation layer across software users already pay for.

Commercial role

Seat upgrades + usage / consumption + product differentiation.

Microsoft Security

Microsoft Security is an integrated cybersecurity portfolio.

Why it exists

Enterprise security spans identity, devices, cloud, applications and data.

Commercial role

Standalone subscriptions, suite upgrades and cloud / consumption security.

Xbox & Game Pass

Xbox & Game Pass is Microsoft's gaming ecosystem.

Why it exists

Gaming gives Microsoft a consumer subscription, content and distribution business outside enterprise software.

Commercial role

Content, subscriptions, transactions and hardware.

The Microsoft Stack

A useful Microsoft stack looks like this:

USER / ORGANIZATION
↓
IDENTITYMicrosoft Entra
↓
END-USER PLATFORMWindows · Microsoft 365 · LinkedIn · Xbox
↓
BUSINESS WORKFLOWDynamics 365 · Power Platform · Teams
↓
DEVELOPER LAYERGitHub · Visual Studio · developer tools
↓
SECURITY / GOVERNANCEDefender · Sentinel · Intune · Purview
↓
CLOUDAzure
↓
AI / MODELSCopilot · OpenAI models · Anthropic · Microsoft MAI · other models
↓
PHYSICAL INFRASTRUCTUREdatacenters · CPUs · GPUs · networks · energy

This stack explains why Microsoft spends heavily on infrastructure while still being classified as a software company.

The software business increasingly requires physical compute.

Who Uses Microsoft?

Employees and consumers

They use:

  • Word;
  • Excel;
  • Teams;
  • Windows;
  • Outlook;
  • Copilot;
  • Xbox.

Enterprise IT departments

They buy and manage:

  • Microsoft 365;
  • Azure;
  • Security;
  • Windows;
  • Dynamics;
  • identity.

Developers

They use:

  • GitHub;
  • GitHub Copilot;
  • Visual Studio;
  • Azure;
  • developer APIs.

Business departments

Sales, service, finance and operations teams use Dynamics and Microsoft 365.

Advertisers

They buy advertising through:

  • LinkedIn;
  • search / advertising properties.

Gamers

They pay for:

  • games;
  • Game Pass;
  • content;
  • transactions;
  • hardware.

OEMs

PC manufacturers license Windows and ship it on devices.

Who Pays Microsoft?

Microsoft has several distinct payer groups.

Enterprises

The enterprise can pay:

per user
for Microsoft 365 / security / Dynamics

plus
cloud consumption
for Azure

plus
AI consumption / Copilot

This makes the same customer relationship expandable.

Developers and software organizations

They can pay for:

  • GitHub Enterprise;
  • GitHub Copilot;
  • Azure;
  • developer tools.

Consumers

They pay for:

  • Microsoft 365 Consumer;
  • Xbox / games;
  • Windows / devices in some forms;
  • subscriptions.

OEMs

PC manufacturers pay Microsoft for Windows licensing.

The OEM channel remains structurally important even though Windows is a smaller share of Microsoft's overall economics than in earlier eras.

Advertisers

Advertisers pay Microsoft through:

  • LinkedIn Marketing Solutions;
  • Bing / search advertising.

Search advertising generated $15.176 billion in FY2026. [S1]

How Microsoft Makes Money

Microsoft does not have one revenue model.

Seat subscriptions

Examples:

  • Microsoft 365;
  • Dynamics;
  • security products;
  • GitHub Enterprise / Copilot.

The economic model is:

users
×
price per user
×
retention

Cloud consumption

Azure can monetize:

compute
storage
database
network
AI inference / training
other services

The customer pays more as usage expands.

License + support

Microsoft still sells some transactional / on-premises software.

Cloud did not eliminate licensing overnight.

It changed the mix.

OEM licensing

Windows licenses can be sold through PC manufacturers.

This is a distribution model tied to the PC ecosystem.

Advertising

LinkedIn and search monetize attention and professional / search intent.

Gaming

Gaming combines:

subscription
+
game sales
+
in-game transactions
+
platform economics
+
hardware

AI — seat plus consumption

Microsoft is increasingly moving from:

AI add-on seat

toward:

seat
+
usage / consumption

Its FY2026 earnings call specifically described that direction across Copilot, GitHub and Dynamics. [S3]

This matters because AI has non-trivial compute cost.

Revenue Architecture

FY2026 significant product and service revenue included:

Server products and cloud services
$129.425B

Microsoft 365 Commercial products and cloud services
$101.997B

Xbox
$21.790B

LinkedIn
$19.817B

Windows and Devices
$17.084B

Search advertising
$15.176B

Microsoft 365 Consumer products and cloud services
$9.175B

Dynamics products and cloud services
$9.006B

Enterprise and partner services
$8.260B

[S1]

This revenue mix shows why describing Microsoft as a Windows business is no longer accurate.

What Microsoft Depends On

Datacenter capacity

Azure and AI growth require:

  • land;
  • buildings;
  • servers;
  • networking;
  • power.

Microsoft's FY2026 10-K says cloud and AI strategy requires large and accelerating capital investment. [S1]

GPUs, CPUs and server components

AI services require specialized compute.

Microsoft says its infrastructure depends on servers including GPUs and other components, some with limited qualified suppliers. [S1]

Electricity

Power has become a strategic input.

The 10-K explicitly identifies predictable and affordable energy as critical to datacenter growth. [S1]

Foundation models and AI research

Microsoft uses:

  • OpenAI models;
  • Anthropic models in some developer workflows;
  • its own MAI model family;
  • other models.

The April 2026 OpenAI agreement gives Microsoft a non-exclusive license to OpenAI IP through 2032 while allowing more cloud flexibility. [S24]

Microsoft's model strategy is therefore increasingly multi-model rather than dependent on only one model family. [S3]

Enterprise trust

Microsoft's products can sit inside:

  • identity;
  • email;
  • documents;
  • cloud infrastructure;
  • cybersecurity.

Security or reliability failures can affect many layers at once.

OEM and hardware ecosystem

Windows depends on:

  • PC manufacturers;
  • semiconductor companies;
  • device availability.

Microsoft also manufactures some first-party devices but relies heavily on external manufacturers and suppliers. [S1]

Developers

A platform is less useful if developers stop building for it.

Microsoft's acquisition of GitHub made the developer relationship more direct.

Partner ecosystem

Microsoft's enterprise reach depends on:

  • resellers;
  • systems integrators;
  • managed service providers;
  • software partners.

The partner channel remains important even as Microsoft sells more cloud services directly.

Who Depends on Microsoft?

Enterprises

Many organizations build core workflows around:

  • Microsoft 365;
  • Entra;
  • Windows;
  • Azure;
  • Dynamics;
  • Security.

Replacing one product may be easier than replacing the entire connected stack.

Developers

GitHub, Visual Studio, Azure and Microsoft developer tools can become part of the software-development lifecycle.

PC manufacturers

OEMs rely on Windows as a major operating-system option.

Software vendors

Independent software companies often build on:

  • Windows;
  • Azure;
  • Microsoft identity;
  • Microsoft marketplaces.

Partners

Consultancies and resellers build service businesses around Microsoft products.

Company Relationship Map

OpenAI

Microsoft ↔ OpenAI
Type: strategic investment + technology + cloud partnership
Scope: AI models, Azure, IP licensing, products

The April 2026 amended agreement says Microsoft remains OpenAI's primary cloud partner and retains a non-exclusive OpenAI IP license through 2032. [S24]

GitHub

Microsoft → GitHub
Type: acquired
Completed: 2018
Scope: developer platform

GitHub remains a distinct developer-facing brand and platform.

LinkedIn

Microsoft → LinkedIn
Type: acquired
Completed: 2016
Scope: professional network

LinkedIn adds professional identity, recruiting, marketing and sales relationships.

Activision Blizzard

Microsoft → Activision Blizzard
Type: acquired
Completed: 2023
Scope: gaming content and studios

The transaction expanded Microsoft's gaming content across console, PC and mobile.

PC OEMs

PC manufacturer ↔ Microsoft
Type: licensing / distribution partner
Scope: Windows

Enterprise customers

enterprise → Microsoft
Type: direct customer
Scope: cloud + productivity + security + business apps

Competition by Business Layer

Microsoft's competitor set changes by product.

Cloud infrastructure

Azure competes with:

  • Amazon Web Services;
  • Google Cloud;
  • Oracle Cloud;
  • other infrastructure providers.

Competition includes:

  • price;
  • capacity;
  • data services;
  • AI;
  • developer ecosystem;
  • enterprise integration.

Productivity software

Microsoft 365 competes with:

  • Google Workspace;
  • standalone productivity / collaboration tools.

The competition is increasingly around:

  • collaboration;
  • AI;
  • security;
  • integration.

Business applications

Dynamics competes with:

  • Salesforce;
  • Oracle;
  • SAP;
  • ServiceNow and specialized application vendors.

Developer platform

GitHub competes with:

  • GitLab;
  • Atlassian / Bitbucket;
  • internal developer platforms;
  • cloud-provider developer tooling.

AI coding adds another competition layer between models and agents.

Security

Microsoft competes with specialist security vendors across:

  • endpoint;
  • identity;
  • SIEM;
  • cloud;
  • data.

Integrated suites compete with best-of-breed tools.

Operating systems

Windows competes with:

  • macOS;
  • ChromeOS;
  • Linux;
  • mobile platforms for some user time.

Gaming

Xbox competes with:

  • Sony;
  • Nintendo;
  • Valve / PC platforms;
  • mobile game ecosystems;
  • other entertainment formats.

History

1975 — Microsoft begins

Bill Gates and Paul Allen start Microsoft around BASIC software for the Altair 8800. [S5][S6]

1981 — MS-DOS and IBM PC

Microsoft enters the operating-system business through the IBM PC ecosystem. [S5]

1985 — Windows

Windows launches as the graphical interface / operating-system platform that later becomes Microsoft's defining consumer and enterprise platform.

1986 — IPO

Microsoft goes public on March 13, 1986. [S5]

1989–1990s — Office and Windows scale together

Office creates a productivity layer on top of the Windows PC ecosystem.

2001 — Xbox

Microsoft enters console gaming. [S6]

2008–2010 — Azure

Microsoft announces Windows Azure in 2008; the service becomes generally available in 2010. [S6]

2011 — Office 365

Microsoft launches Office 365 and begins moving productivity software toward recurring cloud subscriptions. [S6]

2014 — Satya Nadella becomes CEO

Nadella becomes Microsoft's third CEO after leading Cloud and Enterprise. [S8]

2016 — LinkedIn

Microsoft completes the $27.0 billion acquisition of LinkedIn. [S20]

2018 — GitHub

Microsoft completes the $7.5 billion acquisition of GitHub. [S18]

2019 — OpenAI partnership begins

Microsoft begins a strategic investment / partnership with OpenAI.

2023 — Copilot and Activision Blizzard

Microsoft expands Copilot across products and completes the Activision Blizzard acquisition. [S22][S23]

2025 — Microsoft turns 50

The company enters its sixth decade with cloud and AI as its largest growth engines.

2026 — Azure passes $100B and Copilot passes 30M paid seats

Azure revenue surpasses $100 billion for the fiscal year and Microsoft 365 Copilot reaches more than 30 million paid seats. [S2]

How Microsoft Changed

DimensionEarlier MicrosoftMicrosoft in 2026
Core identityPC software companyCloud + software + AI platform company
Main monetizationPerpetual / transactional licensesSubscription + consumption + licensing + ads
Main distributionOEMs + packaged softwareDirect cloud + enterprise agreements + partners + OEMs
Core platformWindowsAzure + Microsoft 365 + Windows + GitHub
Developer relationshipWindows / Visual StudioGitHub + Azure + Copilot + open source
ProductivityOffice release cycleMicrosoft 365 continuous subscription
InfrastructureCustomer-owned serversAzure cloud + hyperscale datacenters
AIResearch / featuresCross-product Copilot + model platform
GamingXbox consoleXbox ecosystem + Game Pass + Activision content
Professional identityNoneLinkedIn
Capital intensitySoftware-heavySoftware + very high datacenter / AI infrastructure investment

The important point is continuity.

Microsoft did not destroy the old business.

It layered new recurring platforms on top of old distribution advantages.

Turning Points

Turning Point 1 — IBM PC / operating-system licensing

Microsoft's operating system became part of a broad hardware ecosystem rather than one proprietary computer.

What it enabled next

A platform business around third-party PC manufacturers and developers.

Turning Point 2 — Windows + Office

Microsoft captured both:

operating system
+
productivity application layer

What it enabled next

Very strong PC-era distribution and enterprise standardization.

Turning Point 3 — Azure

Cloud changed Microsoft from a software licensor into an infrastructure operator.

What it enabled next

Consumption revenue, global datacenters and a platform for enterprise workloads.

Turning Point 4 — Office 365 / Microsoft 365

Productivity moved from upgrade cycles to recurring subscriptions.

What it enabled next

Predictable revenue, continuous delivery and a distribution base for Teams, security and Copilot.

Turning Point 5 — Nadella's cloud / open ecosystem shift

Microsoft became more willing to support:

  • Linux;
  • open source;
  • non-Windows developer ecosystems;
  • competing device platforms.

What it enabled next

Azure and GitHub could grow without requiring every workload to reinforce Windows.

Turning Point 6 — LinkedIn + GitHub acquisitions

Microsoft expanded its graph of:

professionals
+
developers

These acquisitions added communities rather than only software products.

Turning Point 7 — Activision Blizzard

Microsoft expanded its content ownership and mobile gaming presence.

Turning Point 8 — Copilot / AI

Microsoft began turning AI into a layer across existing products.

What it enabled next

Seat + consumption monetization and a new interface across Microsoft software.

Leadership

Satya Nadella

Satya Nadella is Microsoft Chairman and Chief Executive Officer.

His tenure is defined commercially by:

  • cloud-first resource allocation;
  • Microsoft 365 subscriptions;
  • open-source / cross-platform strategy;
  • LinkedIn and GitHub;
  • AI / Copilot;
  • large datacenter investment.

Bill Gates

Bill Gates co-founded Microsoft with Paul Allen.

His era established the structural foundations around:

  • software licensing;
  • operating systems;
  • Office;
  • developer ecosystems.

Amy Hood

Amy Hood has served as CFO since 2013. [S9]

Her role spans:

  • capital allocation;
  • M&A;
  • financial planning;
  • datacenter investment;
  • acquisition integration;
  • shareholder returns.

Major Acquisitions

LinkedIn — 2016

Microsoft completed the acquisition for a total purchase price of $27.0 billion. [S20]

What it added

Professional identity, recruiting, marketing and sales relationships.

GitHub — 2018

Microsoft acquired GitHub in a $7.5 billion transaction. [S18]

What it added

A global developer platform and later the primary distribution channel for GitHub Copilot.

Activision Blizzard — 2023

Microsoft completed the acquisition for a total purchase price of $75.4 billion. [S22]

What it added

Large gaming franchises, studios, mobile gaming and content scale.

What Most People Miss

1. Azure is not Microsoft's only cloud business

Microsoft Cloud includes more than Azure.

It also includes cloud components of:

  • Microsoft 365;
  • LinkedIn;
  • Dynamics.

FY2026 Microsoft Cloud revenue was $214.4 billion. [S28]

2. Windows is smaller economically but still powerful strategically

Windows and Devices generated $17.084 billion in FY2026. [S1]

That is far smaller than Azure-related or Microsoft 365 revenue.

But Windows remains a major endpoint and distribution layer.

3. Microsoft is now extremely capital intensive for a software company

AI and cloud require datacenters, servers, GPUs and energy.

Microsoft says infrastructure capacity is constrained by land, energy, networking and servers. [S1]

Its FY2026 physical infrastructure investment grew sharply.

Software economics now sit on top of a huge physical infrastructure layer.

4. AI monetization is moving beyond a simple seat

Microsoft's Q4 FY2026 call describes several businesses moving toward:

seat
+
consumption

because AI usage creates variable compute cost. [S3]

5. OpenAI is strategically important, but Microsoft is not an OpenAI-only AI stack

The April 2026 agreement preserved Microsoft access to OpenAI IP while making the license non-exclusive. [S24]

Microsoft also develops its own MAI models and exposes models from other providers in some products. [S3]

6. GitHub changed Microsoft's relationship with open source more than its immediate revenue mix

GitHub gave Microsoft a place where developers already worked across:

  • Linux;
  • macOS;
  • Windows;
  • cloud platforms.

The strategic value was developer distribution, not only acquisition revenue.

7. LinkedIn is a large standalone revenue engine

FY2026 LinkedIn revenue was $19.817 billion. [S1]

It should not be treated as a small feature inside Microsoft 365.

8. Gaming is not just Xbox hardware

Xbox revenue includes content and services, and the Activision Blizzard acquisition expanded:

  • console;
  • PC;
  • mobile;
  • subscription.

Hardware is only one layer.

Common Misconceptions

"Microsoft is mainly a Windows company."

No.

Windows remains important, but Microsoft 365, Azure and other cloud services are much larger economic engines.

"Azure revenue equals all Microsoft Cloud revenue."

No.

Microsoft Cloud also includes cloud components of Microsoft 365, LinkedIn and Dynamics. [S28]

"Microsoft 365 is just Office sold online."

Too narrow.

It combines productivity, collaboration, cloud storage, identity / security components and increasingly Copilot.

"GitHub became a Microsoft-only development platform."

No.

Microsoft explicitly preserved GitHub's open-platform / developer-first positioning after the acquisition. [S19]

"Microsoft owns OpenAI."

No.

Microsoft is a major investor / shareholder and strategic partner, but OpenAI is a separate company. [S24][S25]

"Microsoft Copilot is one identical product everywhere."

No.

The Copilot family spans productivity, coding, security and other workflows.

"Cloud removed Microsoft's dependence on hardware."

No.

Cloud shifted the hardware from the customer's server room into Microsoft's datacenters.

"Microsoft makes most Xbox money from console hardware."

No.

Xbox includes content and services, subscriptions and game transactions as well as hardware.

Common Questions

What does Microsoft actually do?

Microsoft sells software, cloud infrastructure, business applications, security, operating systems, developer platforms, advertising and gaming products.

How does Microsoft make most of its money now?

Its largest economic engines are recurring cloud and software businesses, especially Microsoft 365 and Azure-related services.

How much revenue did Microsoft make in FY2026?

$331.839 billion. [S1]

Who founded Microsoft?

Bill Gates and Paul Allen in 1975. [S5]

Who is Microsoft's CEO?

Satya Nadella. [S7]

What is Microsoft's CIK?

0000789019.

What Industry is Microsoft in?

The canonical GICS Industry is:

451030 — Software

The Sub-Industry metadata is Systems Software.

Is LinkedIn still separate?

LinkedIn remains a distinct brand and operating business inside Microsoft.

Does Microsoft own GitHub?

Yes. Microsoft acquired GitHub in 2018. [S18]

Does Microsoft own Activision Blizzard?

Yes. Microsoft completed the acquisition in October 2023. [S22][S23]

Does Microsoft own OpenAI?

No.

Microsoft is a major investor and strategic partner.

What Changed Recently

FY2026 — Revenue reached $331.8B

Microsoft revenue increased 18% year over year. [S2]

Why it matters

The company's scale continues to expand even as the business mix shifts toward cloud and AI.

FY2026 — Azure revenue surpassed $100B

Microsoft said Azure exceeded $100 billion in annual revenue for the first time. [S2]

Why it matters

Azure has become one of Microsoft's largest standalone economic engines.

FY2026 — Microsoft 365 Copilot exceeded 30M paid seats

Microsoft disclosed more than 30 million paid Microsoft 365 Copilot seats. [S2]

Why it matters

Copilot is moving from product launch to meaningful enterprise distribution.

FY2026 Q4 — GitHub reached 225M users

Microsoft said GitHub had 225 million users and GitHub Copilot 50 million users. [S3]

Why it matters

The developer platform is now a major AI distribution surface.

April 2026 — OpenAI partnership was amended

Microsoft retained a non-exclusive license to OpenAI IP through 2032, remained the primary cloud partner and revised revenue-sharing terms. [S24]

Why it matters

The relationship became more flexible while remaining strategically significant.

September 2026 — Copilot was redesigned around Home, Code and Autopilot

Microsoft introduced a new Copilot experience with a unified work home, code-building tools and a persistent proactive agent. [S14]

Why it matters

Copilot is evolving from an assistant attached to applications into a more independent work surface.

Evidence

  • Microsoft generated $331.839 billion of FY2026 revenue. [S1]
  • Productivity and Business Processes generated $139.996 billion, Intelligent Cloud $137.791 billion and More Personal Computing $54.052 billion. [S4]
  • Microsoft Cloud revenue reached $214.4 billion. [S28]
  • Azure surpassed $100 billion of annual revenue and Microsoft 365 Copilot passed 30 million paid seats. [S2]
  • GitHub reached 225 million users and GitHub Copilot 50 million users. [S3]
  • Microsoft acquired LinkedIn, GitHub and Activision Blizzard in 2016, 2018 and 2023 respectively. [S18][S20][S22]
  • Microsoft's current OpenAI agreement preserves a non-exclusive IP license through 2032. [S24]

Explore Microsoft

Platforms & Products

  • Microsoft 365
  • Microsoft Azure
  • Windows
  • Dynamics 365
  • Microsoft Copilot
  • Microsoft Security
  • Xbox & Game Pass

People

  • Satya Nadella
  • Bill Gates
  • Amy Hood

Acquired Companies

  • LinkedIn
  • GitHub
  • Activision Blizzard

Industry