Microsoft Cash Flow
Microsoft Corporation has achieved excellence in since 1975 in the application software industry. They finished the 2005 fiscal year with a market capitalization of $288.20 billion, doubling the closest competitor, IBM which came in second in market capitalization with $131.00 billion, and an industry average of a low $136.51 million .
Being that Microsoft is so large and has a large portion of its funds set-aside for R&D, to improve the technology and develop new products. I would venture to say that the Microsoft Corporation is a master at the use of technology. The company is both a consumer and a supplier of technology. But most importantly the success of its own IT infrastructure depends on its success as a software supplier.
Microsoft Corporation has been enjoying a steady growth in revenue over the past three fiscal years. This has been achieved with the growing popularity of PC use in the world over this time period. Microsoft's preliminary estimates showed a growth of worldwide PC shipments from 11% to 13%, and total server hardware shipments grew approximately 13% to 14%" during the 2005 fiscal year compared to fiscal year 2004. This has caused a growth in revenue of 8% from $36,835 million to $39,788 million from fiscal year 2004 to 2005 (U.S. SEC). This revenue growth was driven by growth in licensing of Windows Server operating systems and other server application, licensing of Windows Client operating systems through OEMs, and increased licensing of Office and other Information Worker products.
The Corporation can afford to make some small mistakes and assume some risk in the business ventures and expansion of the capability to deliver the most advanced technology available in the market today. The increase risks it decides to take are part of the package. At Microsoft Research, they have an insatiable curiosity and the desire to create new technology that will help define the computing experience. Whether inspired by a...