Microsoft Corporation is a multinational technology corporation mainly focusing on producing computer software, personal computers, consumer electronics, etc.
This corporation is one of the Big Five companies in the United States for the information technology industry.
However, Microsoft is not listed as part of the FAANG. FAANG is an acronym for prominent American technology companies. The companies are Meta formerly known as Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Google.
This acronym was introduced by Jim Cramer who is a host of CNBC’S Mad Money in 2013. Jim Cramer praised these companies for dominating their markets. So, you must be wondering why Microsoft is not part of FAANG.
The reason why Microsoft is not part of FAANG.
The reason why Microsoft was not part of FAANG is that when the time acronym was coined Microsoft was still sticking to the same model.
Initially Microsoft Modal was to make innovations on their software and most of the revenue was from the Office productivity software subscriptions.
Therefore, it was not considered as actively expanding the variety of products like the other components of FAANG although it generated a good amount of revenue.
New changes made on the FAANG acronym in 2021
However, in October 2021 Jim Cramer who previously created the FAANG in 2013 suggested a new acronym “MAMAA”.
This acronym has included new companies, and some were replaced. Netflix was dropped and replaced by Microsoft when Microsoft stock surpassed Apple.
Apart from that, Google was also dropped and replaced with Alphabet, Goggle’s parent company.
Thus, this is how MAMAA was announced which is a combination of Meta, Apple, Microsoft, and Amazon Alphabet.
The reason why Microsoft is part of MAMAA
The reason why Microsoft is included in the above acronym is that Satya Nadella (CEO of Microsoft) has done an excellent job in navigating Microsoft in a post-Windows world.
Due to focusing on cloud and AI, the company’s revenue surpassed US$ 100 Billion in the fiscal year 2018. The three core business units generated double digits revenue growth, with Azure Cloud leading the charge by posting 89% year-over-year revenue growth.
Thus, this shows that the model of Microsoft is expanding and focusing on other products to generate revenue.
Commonly asked question
Question: What is Microsoft Azure?
Answer: Microsoft Azure is a cloud computing service provided by Microsoft to manage applications via Microsoft-managed centers.
Question: What is Microsoft Word used?
Answer: Microsoft Word is a prominent product of Microsoft Corporation used mainly to create various types of documents such as brochures, letters, research papers, etc.
The changes made to the Microsoft’s model to other products like Azura cloud service and AI has generated a larger revenue.
Previously many were rethinking the Model of Microsoft as it was sticking to the old model for quite some time.
Therefore, this was recognized and caused the changes on the FAANG as its surpluses the revenue of other previous members of FAANG.
Check out this page on Why have people been rethinking the Microsoft model?
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