The world's largest software maker
) announced that the telecommunications major, Telefonica, has
chosen to deploy Microsoft's Office 365 and Yammer, a social
network service, in its offices globally.
The reason for deploying the Office software and Yammer is to
equip Telefonica with advanced technologies involving the cloud,
which is expected to improve the efficiency of its operations and
improve resource allocation. It will also facilitate
communication, productivity and collaboration among its 130,000
strong workforce across 24 countries.
Office 365 is sold as a service and therefore generates
ongoing revenues for Microsoft instead of a one-time licensing
fee. Launched in 2011, the new Office comes with the traditional
word processing, spreadsheets and email programs.
Microsoft acquired privately-held Yammer last year for $1.2
billion. Yammer specializes in creating private social networks
so employees within the same company can form groups for free
Microsoft's Office 365 is gaining traction in the market as it
recently launched its online version focusing on touch devices.
Further, it is being deployed at the stores of retailers such as
J. C. Penney Company Inc.
) and U.K.-based Tesco as well as government departments such as
the Texas Department of Information Resources, which chose the
software for inter-departmental activities. The latest to jump on
the bandwagon is the International Federation of Red Cross and
Red Crescent Societies (IFRC), which also signed an MoU with
Microsoft. Further, Microsoft's software is gaining ground in the
healthcare sector. The company continues to innovate, launching
separate versions for businesses and student communities.
Currently, just like other PC makers, Microsoft is also
battling the slump in the PC market caused by the sluggish
economy. In addition, the popularity of smartphones and tablets
) are cannibalizing PC market sales, further deteriorating the
scenario. Whether it can come out of the slump on the back of its
new software and OS is a wait and-see game.
Microsoft reported revenues excluding deferrals of $20.49
billion in the third quarter of fiscal 2013, which was down 4.5%
sequentially but up 17.7% from last year, more or less in line
with our estimates. All segments grew strongly from the year-ago
quarter and declined only slightly from the seasonally strong
December quarter. Microsoft's Business Division grew both
sequentially and year over year.
Microsoft has a Zacks Rank #3 (Hold).
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