SWOT Analysis of Microsoft: 2021 Detailed Overview

Name Microsoft Corporation (MSFT)
Industry Software and Tech Services
Founded 1975
HeadquartersRedmond, Washington, United States 
CEO Satya Nadella
Revenue$143 billion (2020)
Profit$44.3 billion (2020); $61.27 billion (2021)
Competitors: Apple Inc., Google Inc., IBM Corporation, SAP

Company Overview

Microsoft Corporation, headquartered in the Redmond regions of Washington, US, has secured one of the top ranks in the software development industry and provides cloud-based solutions, services, platforms, content, solution support, and consulting services. The company was established in November 1975 and has been a tech giant since then. In the fiscal year of 2021, Microsoft Corporation reported a record-high net income of over $61.27 billion and a market cap of $1,966 billion, making it the 2nd largest company after Apple in 2021 (Szmigiera, 2021). Let’s now perform the detailed swot analysis of the company.

Microsoft Strengths 2021

  • Company’s Brand Equity.

    Bill Gates, one of the co-founders of Microsoft, has not only been able to build the company’s brand equity but has also shaped his own public identity as a worldwide business leader. Known as the 5th richest man globally, Bill Gates’s past association with Microsoft Corporation brings the company its charm (Business Insider, 2021). 

  • Constant Growth with Diversified Product Portfolio.

    Given the industrial reports, the company has a diversified portfolio, with revenue generated from software development and hardware products, cloud-based innovation, and recent integration in video games of the USA (Cook, 2020). Microsoft’s global revenue has seen constant growth from 2006 onwards, despite the pandemic crisis. Since then, the company’s revenue is growing 18% year on year (Liu, 2021). Further, the Microsoft Office suite remains the most widely used software worldwide. 

  • Largest Market Outreach.

    Microsoft is an international brand with access to the largest loyal customer base. It operates in over 190 countries over the globe, with its Windows Operating System making it a household feature. For example, in 2018, Microsoft’s Windows operating system experienced 700 million installs worldwide (Hill, 2018). The following chart shows that Microsoft Corporation has the largest market share in the software publishing industry (Ristoff, 2021). 

Market Share of Software Publishing Industry in the US. Source: Ristoff, (2021)

  • Environmental Policies and Philanthropy Activities.

    The company is ahead of its competition in a world where government policies and regulations are putting increasing pressure on tech companies to adopt environmentally friendly practices (Microsoft, 2020). It received an “Outperformer” rating and a AAA rating in ESG. It ranks 6th globally with respect to CSR reputation (Microsoft, 2019).

  • Capitalising on Diversified Industries

    Accordingly, Microsoft has been leading the video games industry in the USA after Nintendo, indicating that the company’s diversified portfolio and its constant growth in a multi-billion-dollar business (Novet, 2020). Even though it is a whole different dimension, the company has captured a 9.7% market share with its different versions of the Xbox gaming console (Cook, 2020). 


Microsoft Weaknesses 2021

  • Highly Reliant on the PC market.

    The company is primarily dependent on its hardware segment of personal computers, making it the most significant segment to impact Microsoft’s revenues. However, because the company has third-party manufacturers of PCs, it often faces frequent shipment failures and currency fluctuations. It has led Microsoft to be in a vulnerable position. 

  • Weak Cyber Security Disrupting Operations.

    Microsoft’s Windows operating system is often attacked by hackers, leading to privacy breaches and loss of data (Winder, 2020). The increasing number of such cybercrime cases have disrupted the company’s reputation and operations. 

  • Falling Behind in Segments.

    Even though Microsoft has been able to diversify its product portfolio, it is falling behind its competitors due to a lack of innovation in many segments. One of its examples is its internet browser, where the company has lost the market (Smith, 2021). The same browser is now used to download other browsers of Google, Safari, and Firefox. Another ideal example is its hardware segment, where Microsoft’s lack of innovation is making its computers and phones outdated (Savov, 2017). 

  • Failed Mergers & Acquisitions.

    On the one hand, the company has a range of successful forward and diversified forward integration at the same time. It has been associated with several failed acquisitions. To name a few, WebTV, Massive, Danger, and Link Exchange resulted in unprofitable investments (Rosoff, 2011). This has weakened Microsoft’s position as the global leader over time in the market.

Microsoft Opportunities 2021

  • Better Innovation in hardware and software products.

    With Microsoft’s growth in cloud-based services and integration in gaming technology, the company has immense prospects to expand in these industries using AI and other advanced machine learning systems. Investing in these areas can be profitable for Microsoft, giving it the upper hand amongst the competitors. Amidst the pandemic crisis, consumer purchasing trends have made the cloud computing services industry a global market of $313.1 billion (Business Wire, 2021). Simultaneously, growth predictions of the gaming industry also indicate that there will be 400 million new gamers by the end of 2023 (News Room, 2021). The following pie chart indicates how Microsoft can integrate into different consoles, hardware and software to expand into the gaming industry. 


Gaming: The New Super Platform. Source: News Room, (2021)

  • Growth in the sector of Cybersecurity.

    There have been many instances where Microsoft has taken an aggressive stance on cybercrime reported, such as the purchase of CyberX for $165 million (Koksal, 2020). This allows the company to leverage its market position to develop products that can help reduce the increasing risk of cyber-attacks on different sectors and industries being targeted. 

Microsoft Threats 2021  

  • High Competition.

    For the longest time, Microsoft was considered to be the only leading software company. However, the company has lost its market share over time due to rising competition and lack of innovation. For example, Google has crossed Internet Explorer, Apple iOS and Android has overthrown the windows software in phones (Sohail, 2019).  Although the company is one of the leaders in the gaming industry with its Xbox console, Nintendo and Sony are just around the corner with their high-tech gaming devices (Cook, 2020). 

  • Shifting Consumer Trends.

    Since Microsoft is a part of the technology sector, it should be noted that consumer trends can be changed easily with disruptive market products. As of now, people prefer smartphones, notepads and laptops. Microsoft’s competitors have the highest share in such markets. 

  • Cybercrime and Piracy Issues.

    Microsoft security system and revenues have been negatively impacted by the rising thefts of software piracy (Microsoft, 2021). The following pie-chart shows the usage of pirated software as compared to genuine software. 

“Software Piracy Rate. Source: Microsoft (2021)”
  • Open-Sourced Software.

    With consumer preferences shifting, many competitors now provide open-source software such as Linux OS or Open-Source office. These open-sourced software offers the same services as Microsoft software, but for free; hence, threatening the consumer base of the company as well as revenues. 

SWOT Analysis of Microsoft Conclusion 2021

Overall, Microsoft Corporation is one of the leading tech companies operating in the international market for 46 years. The strengths suggest that the company has been successful in outperforming its competitors in the software industry market. On the contrary, weaknesses, and prediction of future threats indicate that Microsoft Corporation needs to adapt and innovate to the new technology of AI and cloud computing to overcome the aggressive competition and reduce cyber security threats. Finally, there is a need to strategize the production of the largest market segment of PCs to capitalize on the gamification trends (i.e., gaming computers).  


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Business Wire. (2021). $313.1 Billion Worldwide Cloud Computing Services Industry to 2027 – Impact of COVID-19 on the Market.

Cook, D. (2020). Video Games in the US. IBIS World.

Hill, B. (2018). Windows 10 Now Installed on Over 700 million Devices Worldwide. Hot Hardware.

Koksal, I. (2020). Microsoft Acquires CyberX to Boost IoT Deployments. Forbes.

Liu, S. (2021). Microsoft’s revenue worldwide 2002-2021. Statista.

Microsoft. (2019). Corporate Social Responsibility [Online] Available at https://www.microsoft.com/en-us/corporate-responsibility/recognition [Accessed 26th Sept. 2021]

Microsoft. (2020). 2020 Environmental Sustainability Report – A Year of Action.

Microsoft. (2021). Addressing Global Software Piracy.

News Room. (2021). Global Gaming Industry Value Now Exceeds $300 Billion, New Accenture Report Finds.

Novet, J. (2020). Microsoft’s Diversification Helps It Stand Out from Other Mega-Tech Stocks. CNBC.

Ristoff, J. (2021). Software Publishing in the US. IBIS World. 

Rosoff, M. (2011). Microsoft’s Biggest Acquisitions and What Happened to Them. Business Insider.

Savov, V. (2017). Windows Phone was a Glorious Failure. The Verge.

Smith, A. (2021). Why Internet Explorer Had to Die. The Independent.

Sohail, O. (2019). Bill Gates Says Microsoft Losing to Android in the Smartphone OS Market Share Was His ‘Greatest Mistake Ever’. WCCF Tech.

Szmigiera, M. (2021). Biggest Companies in the World by Market Capitalization 2021. Statista.

Winder, D. (2020). Microsoft Warns of ‘Devastating’ Cybersecurity Threat: Here’s What you Need to Know. Forbes.

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