Given the pace of technological change, tech companies always need to be on their toes. It was only five years ago that BlackBerry was on the top of the world, capturing nearly 20% of the global smartphone market and earning nearly $5 billion in annual operating profits. Today, after missing the shift toward touchscreen devices, the rise of the iPhone and Android has left BlackBerry a shell of its former self. BlackBerry's market capitalization, which peaked at nearly $80 billion in 2009, has declined by 95%.
Even the most successful tech company can be ravaged by unforeseen developments, and that makes investing in tech companies for the long term a difficult task. A lot can happen in ten years, and by 2025, the way in which people interact with technology and computers could be drastically different compared to today. There is one company, however, that appears well positioned to not only survive, but thrive, over the next 10 years: Microsoft (NASDAQ:MSFT).
Oh, how things have changed
A few years ago, it looked like Microsoft was at risk of being left behind. The era of Windows being the only major platform was over, with the shift being driven by the rapid growth of mobile devices. Smartphones were becoming the first, and sometimes only, computing device for a growing number of people, and PC sales entered a prolonged malaise.
With Windows 8, Microsoft attempted to create an operating system that could run on both PCs and tablets. Microsoft succeeded, but Windows 8 was flawed, skewed too heavily toward its new tile-based interface, alienating PC users. The OS never truly took off. This was a problem, because Microsoft's other software products, with Office being the most important, were still mostly exclusive to Windows.
Satya Nadella took over as Microsoft CEO in 2014, and the company's strategy was overhauled. Microsoft recognized that being Windows-centric would no longer work when people were using all manner of devices, not just PCs. The company began releasing its software for all major platforms, putting Office on Android devices, iPhones, iPads, and on the web with Office Online. Microsoft shifted to a software-as-a-service model, selling subscriptions to Office 365 which included cloud storage and the ability to collaborate in real-time. Office went from being the premier Windows productivity suite to being the premier productivity suite, period.
Windows is still important, and with Windows 10, Microsoft has fixed many of the problems with Windows 8, releasing an OS that can run seamlessly on nearly any device, from smartphones to powerful desktop PCs. On the hardware front, Microsoft has produced some truly innovative products, like the Surface Pro 4 and the Surface Book, both of which fully take advantage of the versatility of Windows 10. Another innovation coming from Microsoft is the HoloLens, an augmented reality headset that has the potential to reinvent how people interact with computers.
This newfound focus on enabling productivity on all devices, not just PCs, puts Microsoft in a position where it will be able to more easily adapt to whatever changes occur over the next decade. Ten years ago, the iPhone hadn't been released yet, and the idea of cloud computing was in its infancy. Ten years from now, new technologies will have almost certainly disrupted some of the most successful tech companies of today. Microsoft, no longer limited to a goal of pushing Windows, has a very good chance of standing the test of time.
Timothy Green has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.