Microsoft 2014 Annual Report Download - page 18

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17
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of
operations and financial condition of Microsoft Corporation. MD&A is provided as a supplement to, and should be read in
conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements.
OVERVIEW
Microsoft is a technology leader focused on being the productivity and platform company for the mobile-first and cloud-first
world. We strive to reinvent productivity to empower people and organizations to do more and achieve more. We create
technology that transforms the way people work, play, and communicate across a wide range of computing devices.
We generate revenue by developing, licensing, and supporting a wide range of software products, by offering an array of
services, including cloud-based services to consumers and businesses, by designing, manufacturing, and selling devices
that integrate with our cloud-based services, and by delivering relevant online advertising to a global audience. Our most
significant expenses are related to compensating employees, designing, manufacturing, marketing, and selling our
products and services, datacenter costs in support of our cloud-based services, and income taxes.
Industry Trends
Our industry is dynamic and highly competitive, with frequent changes in both technologies and business models. Each
industry shift is an opportunity to conceive new products, new technologies, or new ideas that can further transform the
industry and our business. At Microsoft, we push the boundaries of what is possible through a broad range of research
and development activities that seek to identify and address the changing demands of customers, industry trends, and
competitive forces.
Key Opportunities and Investments
We see significant opportunities for growth by investing research and development resources in the following areas:
• Digital work and life experiences.
• Our cloud operating system.
• Our devices operating system and hardware.
With investments in these areas, we work to fulfill the evolving needs of our customers in a mobile-first and cloud-first
world. We view mobility broadly – not just by devices, but by experiences. Today, people move just as quickly into new
contexts as to new locations. Mobility goes beyond devices users carry with them as they move from place to place, to
encompass the rich collection of data, applications, and services that accompany them as they move from setting to
setting in their lives. Many of our customers are “dual users,” employing technology for work or school and also deeply in
their personal lives.
Digital work and life experiences
We believe we can significantly enhance the digital lives of our customers using our broad portfolio of communication,
productivity, and information services. We work to deliver digital work and life experiences that are reinvented for the
mobile-first and cloud-first world. Productivity will be the first and foremost objective, to enable people to meet and
collaborate more easily, and to effectively express ideas in new ways. We will design applications as dual use with the
intelligence to partition data between work and life while respecting each person’s privacy choices. The foundation for
these efforts will rest on advancing our leading productivity, collaboration, and business process tools including Skype,
OneDrive, OneNote, Outlook, Word, Excel, PowerPoint, Bing, and Dynamics.
We see opportunity in combining these services in new ways that are more contextual and personal, while ensuring
people, rather than their devices, remain at the center of the digital experience. We will offer our services across
ecosystems and devices outside our own. As people move from device to device, so will their content and the richness of
their services. We will engineer applications so users can find, try, and buy them in friction-free ways.