What's behind Microsoft's not-so-crazy startup spending spree

CEO Nadella’s influence, platform-agnostic approach cited

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acquisitions is a newfound respect for the ecosystem that surrounds the company's software and hardware products.  From an ethos that was much more protective and silo-ed, Microsoft is making major moves in extending their software onto other companies’ platforms (leading productivity apps on IOS and Android like Sunrise and Acompli, a platform-agnostic file viewing service like LiveLoop, third-party integrations with Dropbox, etc).”

Jack Gold (@jckgld), principal analyst and founder of J. Gold Associates, describes Microsoft's moves as both offensive and defensive, and a good use of a cash hoard that hovers around $90 billion even if the company is just scooping up qualified professional staff additions.

"Nadella has refocused Microsoft on becoming innovative again, after a significant number of years where it mainly coasted," he says. "The acquisitions signal a willingness to go outside for tech it doesn't have, but thinks it needs to be competitive long term with Google, Apple, IBM, Samsung, etc. Further, it signals that it's full blown into going to the cloud, after its lukewarm thrusts under the previous management. That's the offensive side."

Defensively, look for Microsoft to consume valuable startups and other companies going forward before Google, Apple and others do, Gold says. "As for what this means for enterprise, I see Microsoft's newfound willingness to go after tech outside its four walls as a refresh of its earlier years where it was an innovator" with Office, Exchange and Windows, he says.

While none of Microsoft’s latest deals would be characterized as blockbusters  – unlike billion-dollar-plus transactions in recent years for Nokia’s phone business, Skype and even Minecraft maker Mojang – the startups being stockpiled could pay big dividends for the company and its customers.

Microsoft acquisitions in recent years

Acquisition Announced Business Value (in Millions $)
LiveLoop 3/27/15 PowerPoint collaboration
N-trig* 2/12/15 Pen-based computing 200
Sunrise 2/4/15 Calendering
Revolution Analytics 1/23/15 R programming/analytics
Equivio 1/20/15 Text analytics/e-discovery
HockeyApp 12/11/14 Mobile crash analytics/app distribution
Acompli 12/1/14 Mobile messaging
Aorato 11/13/14 Security
Mojang 9/15/14 Minecraft game 2500
InMage 7/11/14 Cloud-based business continuity
SyntaxTree 7/2/14 Game development tool
Capptain 5/28/14 Mobile analytics
GreenButton 5/1/14 Cloud app management
Parature* 1/14/14 Cloud-based customer engagement 100
Apiphany 10/23/13 API management
Nokia phone business 9/2/13 Mobile phone hardware 7200
InRelease 6/3/13 Application delivery
NetBreeze 3/7/13 Social analytics
MetricsHub 3/4/13 Cloud monitoring
Pando Networks* 2/2/13 Managed peer-to-peer media distribution 11
R2 Studios 12/28/12 Home automation
StorSimple 10/12/12 Cloud storage
MarketingPilot 10/15/12 Marketing automation
PhoneFactor 10/4/12 Security/authentication
Perceptive Pixel 7/9/12 Multi-touch displays
Yammer 6/25/12 Collaboration 1200
VideoSurf 11/22/11 Video search 100
Prodiance 6/7/11 Spreadsheet controls
Skype 5/10/11 Telecom 8500
Canesta 11/26/10 Gesture recognition
AVIcode 10/6/10 .NET app performance monitoring
Sentillion 2/2/10 Healthcare single sign-on software
Opalis Software 12/11/09 IT process automation
Teamprise 11/11/09 Development tools
LS Retail 9/22/09 Retail industry software
Interactive Supercomputing 9/21/09 Desktop parallel computing
BigPark 5/7/09 Interactive online gaming
Greenfield Online 8/29/08 Search and e-comm 486
DATAllegro 7/24/08 Data warehousing
Zoomix 7/14/08 Data quality technology
Powerset 7/1/08 Natural language search
MobiComp 6/27/08 Mobile backup
Navic Networks 6/17/08 TV ad technology
Farecast 4/9/08 Search software 75
Komoku 3/20/08 Rootkit security 5
Rapt 3/14/08 Advertising software
Kidaro 3/12/08 Desktop virtualization
Credentica 3/6/08 Online privacy
YaData 2/27/08 Ad targeting
Danger 2/11/08 Mobile Internet 500
Caligari 2/7/08 3D modeling/animation
Calista 1/21/08 Graphics performance software
Fast Search & Transfer 1/8/08 Enterprise search 1200
Data from Microsoft acquisition tracker, Wikipedia list of Microsoft buyouts & Network World archives. *Indicates deal itself or deal value unconfirmed by Microsoft. Deal values left blank were undisclosed by Microsoft.
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Copyright © 2015 IDG Communications, Inc.

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