Microsoft Windows 8 Finds More Takers - Analyst Blog

By Zacks | June 26, 2013 AAA

The world’s largest software maker Microsoft Corp. (MSFT) recently announced that 32 K–12 schools are deploying its Windows 8 OS. Also, 24 school districts, including the Scarborough School District, Brewer School Department, Maine School District #74 and Maine School District #60 have adopted Windows 8.

Windows 8 is playing a major role in helping schools to upgrade learning tools. It supports new education standards and online assessment and ensures seamless transition to digital learning by creating a platform for easy content creation and consumption.

Recently, some higher education institutions such as Atlanta Public Schools, Fresno Unified School District and San Antonio Independent School District also adopted Windows 8 for various purposes. The solution provides students access to applications like Word, Excel, PowerPoint and Outlook, and OneNote.

According to a report by IDC, Google’s (GOOG) Android OS shipments touched 162.1 million units in first quarter of 2013, up 75% year over year. In the process, it captured 75.0% market share, followed by Apple’s (AAPL) iOS, which managed to retain 17.3% share. Microsoft’s Windows OS lagged far behind with a 7% share of the market.

However, Microsoft’s growing clout in the academic and government verticals, as well as steady progress in the consumer hardware business bode well for longer-term growth.

Microsoft remains one of the best-positioned software vendors, given its wide range of products, emerging markets strength, continued technology deployment at data centers and growth in cloud computing. The company delivered better-than-expected second quarter results with non-GAAP earnings up sequentially. New products across segments, strength in the cloud computing segment and share gains in search combined to generate encouraging results.

Currently, just like other PC makers, Microsoft is also battling the slump in the PC market caused by the sluggish economy. To make matters worse, tablets continue to cannibalize its core PC market. Though Microsoft has launched its own mobile devices (both tablets and smartphones), it will have to deal with significant competition in these markets.

Microsoft has a Zacks Rank #4 (Sell). Another stock that has been performing well and is worth considering is Pegasystems (PEGA), carrying a Zacks Rank #1 (Strong Buy).

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