Skip to main content

IBM overtakes Microsoft to become second-most valuable tech company

ibm-smarter-cities-challenge-map
Image used with permission by copyright holder

IBM may not make the news much nowadays with big consumer product announcements, but that hasn’t stopped the long-time computer giant from growing. In fact, IBM’s market value has now officially passed that of Microsoft, making it the second-most valuable technology company in the world, after Apple, and the fourth most-valuable company in the world, overall.

The value of IBM jumped to $214 billion on Thursday, while Microsoft’s market value dropped to $213.4 billion, reports Bloomberg. This marks the first time since 1996 that the two companies have been this close in price.

IBM’s rise is the product of CEO Sam Palmisano’s strategy to focus on software and consulting businesses, rather than PC manufacturing. In 2005, Palmisano sold IBM’s PC business to Lenovo. Since then, the company has spent a reported $25 billion investing in its software and other business ventures. The move has led to an increase in per-share profit for more than 30 straight quarters. And sales have risen 20 percent from 2001 through 2010.

Microsoft, on the other hand, has gone in the opposite direction. In 2000, Microsoft’s worth was more than $430 billion. The market downfall in 2008 forced its value down to $135 billion as of 2009. And it has since increased in value as the markets grew stronger.

Revenue from its Windows and Office software businesses account for approximately 60 percent of its total, or about $69.9 billion as of its previous fiscal year, which ended in June. Success in with these products, as well as Xbox, helped boost Microsoft’s sales last quarter, but the company continues to loose money on its online services ventures, which includes the Bing search engine. That segment brought in increased revenue in the last quarter, about $662 million, but its operating losses grew to $728 million.

Editors' Recommendations

Andrew Couts
Former Digital Trends Contributor
Features Editor for Digital Trends, Andrew Couts covers a wide swath of consumer technology topics, with particular focus on…
The Microsoft Store just got serious about becoming a PC gamer destination
windows: xbox pc gaming

Microsoft announced today that it's cutting its revenue share for games on the Windows Store from the industry-standard 30% to only 12% starting August 1. The announcement is a clear shot at Steam, which has long dominated the PC gaming space and still demands 30% from game publishers. Microsoft joins Epic Games at the 12% mark, applying even more pressure on Steam to overhaul its business model.

The new revenue-sharing agreement is a bid to attract developers to the Microsoft Store. Image used with permission by copyright holder

Read more
How to get Microsoft Office for free
A person using a laptop that displays various Microsoft Office apps.

While Microsoft Office is offered at a few different prices, none of them are considered budget-friendly. In fact, it's quite the opposite: The scarce stand-alone versions of the office suite start at around $150, while subscriptions run $7 per month or $70 annually.

Thankfully, there are ways to get it for free, despite the fact Microsoft wants to charge a premium for its well-known productivity apps.
See more

Read more
Microsoft Office 2021 includes one highly requested feature
A diagram of different Microsoft Office screens.

Microsoft has announced the next major stand-alone version of its popular non-subscription-based Office suite. Bringing with it true dark mode support in Excel and Word, Office 2021 is now officially set to hit PCs and Macs later this year.

Though Microsoft isn't getting into the full details or availability of Office 2021 at the moment, it did promise two versions of the suite for those who can't (or are not ready) to subscribe to Microsoft 365, which includes the cloud versions of Office apps like Word for a monthly or yearly price. There's both a consumer version, as well as a Long-Term Servicing Channel (LTSC) version for businesses, Both versions are set to become available on Windows and MacOS in both 32-bit and 64-bit flavors.

Read more