- Morgan Stanley told investors that it expects 12 technology trends to emerge from the pandemic, including a faster shift to the public cloud and video conferencing.
- Microsoft is mentioned as a beneficiary is six of the trends, more than any other company.
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Morgan Stanley just laid out the 12 technology trends it expects to emerge from the pandemic, and Microsoft was mentioned in more categories than any other company.
The investment bank published an analyst note for investors on Wednesday that highlighted the areas it expects customers to spend the most and that it believes will prove sustainable even past the pandemic
Microsoft is expected to be a beneficiary in half of the dozens areas, including the shift to the public cloud and video conferencing. Here are the highlights:
Working from home is ‘not just a passing phase.’ Zoom will dominate in the video conferencing market, but Microsoft will benefit from increased spending, too.
Prior to COVID-19, 28% of respondents to a Morgan Stanley survey said they used Microsoft for videoconferencing, whether through Teams or Skype, while 27% used Zoom. But in the last few months, Zoom surpassed Microsoft and other companies in new license adds and is now positioned to dominate the video conference market moving forward, according to the analysts: Of the companies that increased spending on video conferencing after the crisis began, 59% increased spending with Zoom compared to 39% who increased spending with Microsoft.
While analysts said employees returning to physical offices could trigger a sell-off for stocks like Zoom and Microsoft, they ultimately believe that working from home is “not just a passing phase.” They predict that around 42% of increases in spending on video conferencing will be permanent, for which Microsoft will claim some share.
Morgan Stanley expects the coronavirus crisis to trigger a rapid shift to the public cloud – and Microsoft is expected to get the largest share of spending.
The public cloud is becoming “key for business survival as companies focus on improving connectivity during COVID-19,” analysts wrote Wednesday.
Meanwhile, Microsoft Azure surpassed Amazon Web Services as the preferred public cloud vendor in a Morgan Stanley survey of technology executives earlier this year, for the first time since 2018 when its data starts. Morgan Stanley’s first-quarter survey of chief information officers is meant as a measure to predict where companies plan to spend their IT budgets.
Amazon is still the largest public cloud by market share. The most recent available data from Gartner from the end of 2018 said AWS had 47.8% of infrastructure market share and Microsoft had 15.5%.
Microsoft will benefit in big trends like low-code applications, data analytics, healthcare tech, and AR/VR.
As organizations continue to digitize their business processes, Morgan Stanley expects that companies that offer platforms to help customers develop applications with little or no code will benefit. Microsoft is expected to win in this shift because of its Power Platform suite of applications.
Morgan Stanley analysts also said companies are starting to make big investments in data-focused technologies like artificial intelligence and machine learning, and Microsoft stands to benefit there, too.
Other trends in which the analysts expect Microsoft to be a beneficiary include big tech’s entrance into healthcare — which Microsoft just made in a big way with its first industry-specific cloud for the healthcare industry — and growing investments in the augmented and virtual reality, which has expanded use cases after the pandemic.
“COVID-19 should help expand AR/VR use cases because the need to interact at a distance has never been so mandatory,” the analysts wrote, “Ushering in a whole new normal for how people will approach in-person interactions in the future.”
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