Our future opportunity
There are several distinct areas of technology that we are focused on driving
forward. Our goal is to lead the industry in these areas over the long-term,
which we expect will translate to sustained growth well into the future. We are
investing significant resources in:
• Developing new form factors that have increasingly natural ways to use
them, including touch, gesture, and speech. • Applying machine learning to make technology more intuitive and able to act on our behalf, instead of at our command. • Building and running cloud-based services in ways that unleash new experiences and opportunities for businesses and individuals. • Establishing our Windows platform across the PC, tablet, phone, server,
and cloud to drive a thriving ecosystem of developers, unify the cross-device user experience, and increase agility when bringing new advances to market.
• Delivering new high-value experiences with improvements in how people
learn, work, play, and interact with one another.
We believe the breadth of our devices and services portfolio, our large, global partner and customer base, and the growing Windows ecosystem position us to be a leader in these areas.
Economic Conditions, Challenges, and Risks
The market for software, devices, and cloud-based services is dynamic and highly competitive. Some of our traditional businesses such as the Windows operating system are in a period of transition. Our competitors are developing new devices and deploy competing cloud-based services for consumers and businesses. The devices and form factors customers prefer evolve rapidly, and influence how users access services in the cloud and in some cases the user's choice of which suite of cloud-based services to use. The Windows ecosystem must continue to evolve and adapt, over an extended time, in pace with this changing environment. To support our strategy of offering 25
Table of Contents PART II Item 7 a family of devices and services designed to empower our customers for the activities they value most, we announced a functional realignment in
July 2013. Through this realignment our goal is to become more nimble, collaborative, communicative, motivated, and decisive. Even if we achieve these benefits, the investments we are making in devices and infrastructure to support our cloud-based services will increase our operating costs and may decrease our operation margins. We prioritize our investments among the highest long-term growth opportunities. These investments require significant resources and are multi-year in nature. The products and services we bring to market may be developed internally, as part of a partnership or alliance, or through acquisition. Our success is highly dependent on our ability to attract and retain qualified employees. We hire a mix of university and industry talent worldwide. Microsoftcompetes for talented individuals worldwide by offering broad customer reach, scale in resources, and competitive compensation.
Aggregate demand for our software, services, and hardware is correlated to global macroeconomic factors, which remain dynamic. See a discussion of these factors and other risks under Risk Factors (Part I, Item 1A of this Form 10-K).