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July 2018
IT Services – Microsoft
Sectorwatch
The Microsoft ecosystem continues to thrive. Microsoft's Server Products and Cloud Services is largely growing and gaining market share and is expected to grow ~18% YoY in 4Q 2018. Microsoft continues to eat into Amazon's lead in the cloud infrastructure market placing Microsoft strong in second place behind Amazon.
Industry Trends:
- Current revenue growth rate exceeds the average of the last 3 years, indicating that market momentum is increasing
- Current gross profit margin exceeds the average of the last 3 years gross profit margin, indicating supplier pricing power
- Current EBITDA margin is less than the average of the last 3 years EBITDA margins, which may signal further consolidation
