Shareholders of both Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTC) were finally rewarded in 2014 for their patience. Though the two tech behemoths play in slightly different sandboxes, they have a lot in common, some of it good, some of it not so good.

Both Microsoft and Intel lagged their peers prior to 2014 due to their slow transition to cutting edge technologies, including mobile and cloud solutions. But that was then, and 2015 is now. Investors have reveled in Microsoft's nearly 26% jump in share price in 2014, along with Intel's 41% pop. Now the question is what each will do for an encore. With clearly defined paths, and outstanding dividend yields relative to their peers, Microsoft and Intel are each primed for yet another impressive year. But which offers the most upside? It's a close call, but one holds a slight edge for investors in search of appreciation and dividend income along the way.

The case for Microsoft
Microsoft remains the king of software, and that's certainly not going to change any time soon. What has changed since the departure of former CEO Steve Ballmer is Microsoft's strategic focus, best described by new chief Satya Nadella's "mobile-first, cloud-first" mantra. Ballmer, to his credit, readily admitted he was slow in shifting Microsoft's focus on PC-related software and solutions to mobile and cloud technologies, and shareholders paid the price.

Now Microsoft's transition, while not complete, is gaining traction by the day. With each successive quarter, Microsoft distances itself from the cloud competition. In its most recent fiscal 2015 Q1, Nadella once again announced triple-digit growth in cloud-related revenues, and there's no reason to think that won't continue when Microsoft announces fiscal Q2 results on Jan 26. Microsoft's impressive cloud-related financial performance wasn't the sole reason behind its 25% jump in quarterly revenues, but it certainly played a role.

As for mobile, Nadella's made it clear his plans go well beyond devices. The new Surface Pro 3 pseudo-tablet looks like a winner -- don't be surprised by stellar holiday sales results -- and Microsoft's emphasis on entry-level, low-cost phones in emerging markets is a sound strategy. But those are just the tip of Microsoft's mobile iceberg.

Nadella's introduction of Office 365 for iOS was more than a potential boon for software sales; it essentially ushered in a new mobile era for Microsoft. Since then, Microsoft has taken the wraps off an Office 365 version for Android, introduced its latest Visual Studio dev solution with Android-compatible development capabilities and a new mobile streaming solution for gamers, and opened the doors of its primary software platform .NET, making it open source and cross-platform.

Don't discount Intel
When Intel CEO Brian Krzanich was tapped as Paul Otellini's replacement he faced the same conundrum as Microsoft: moving the PC-reliant chip king into new markets, primarily cloud, mobile, and the Internet of Things (IoT). Like Ballmer, Otellini shouldered the blame for moving too slowly to an emphasis on cloud and related solutions, and Intel's stock floundered.

But coming off a record-breaking Q3 in which Intel generated revenue of $14.6 billion, a 30% jump in operating income, and upped gross margins from last year's 62.4% to its most recent quarter's impressive 65%, Krzanich has Intel hitting on all cylinders. How? Much of Intel's improvement is due to its dominant position supplying chips and related solutions to cloud-based data centers. Intel's Data Center Group generated about 25% of total revenue, increasing 16% compared to 2013's Q3.

Establishing itself as the data center chip supplier of choice in what IDC predicts will become a $127 billion market by 2018 bodes well for Intel, in 2015 and beyond. IoT, another market expected to explode, accounted for $530 million in revenue last quarter -- and while that may seem paltry relative to Intel's total sales, a 14% pop in sales, which Intel's IoT division accomplished, is nothing to sneeze at, particularly as the market as a whole is in its infancy.

As for income, both Intel and Microsoft are near the top compared to their tech brethren. Intel's balance sheet doesn't compare to Microsoft's, but with over $12.5 billion in cash and equivalents, its 2.45% dividend yield is certainly not in jeopardy. Nor is Microsoft's 2.63% dividend yield, considering it's sitting on over $89 billion in ready cash.

Both Intel and Microsoft have found their footing, and investors are right to expect continued price appreciation. Coupled with their strong dividend yields, it's nearly a toss-up as to which offers the most growth and income potential in 2015. But Microsoft, in addition to its slightly higher dividend, is a bit further along in its strategic transition than Intel, giving Nadella and team the edge in the New Year.