IBM Now More Valuable Than Microsoft

IBM passed Microsoft in market cap for the first time in 15 years. By the end of the day Friday, IBM's market cap had hit $208 billion, just edging out Microsoft's $207.9 billion. While IBM's stock has been rising over the past year, Microsoft's has stayed flat, and has started to drop. Both companies come behind Apple, which at over $311 billion is well ahead.

Microsoft's fall to third comes a year after Apple first passed Microsoft in value. At the time, Apple's market cap was $222 billion to Microsoft's was $219 billion. But as Apple continues to strengthen its lead, Microsoft has let the gap widen.

According to Geekosystem, Microsoft's stock has fallen 58 percent since the beginning of the 2000s, while IBM's stock has increased in value by 57 percent.

Though stock fluctuations could bring Microsoft back up to number two, the event serves as a sharp reminder of just how different the situation was 20 years ago, when Microsoft looked unbeatable, and IBM seemed poised to fade into obsolescence.

Comments

[Sundialsvc4]

02:32 AM on 05/24/2011

There is a =huge= difference, though, between IBM and Microsoft.

IBM is a diversified technology company with its hands in many different pies. Microsoft, on the other hand, is fairly dedicated to just one. So, no matter what the numbers might be, you're comparing apples to oranges.

IBM learned a long time ago that it's not in the business of keeping Wall Street happy: it's in the business of keeping Customers happy. It didn't always understand this. It took Lou Gertsner to knock sense into them.

[Morgantheaxe]

02:01 AM on 05/24/2011

A company that sells garbage software has just been surpassed in market cap by a company that specializes in selling technology to old rich guys who know nothing about the technology they are buying. Sweet gig if you can get it. Want to imagine an incredible world? Imagine what technology is going to look like when Gen X or Y are the CEOs. I see these worthless point of sale systems rocking fifteen year old technology and I just laugh.

[ewj1]

04:05 PM on 05/24/2011

Ignorance is bliss and rumors are better than facts should be your motto.

[bryanzth]

07:20 PM on 05/23/2011

Who is going to buy Microsoft? After all, it will lose money buying Skype and is currently weakened.

I can see it now, instead of Vista 8, it will be IBM OS/8. Hahahaha!

BZ.

[nitwitsRus]

07:09 PM on 05/23/2011

Please wait a moment and try again. For more information, check out you guys?

[YoureSoShain]

03:38 PM on 05/23/2011

I use Open Office and Outlook. I still haven't found a better client than Outlook for mail. I've tried Eudora and Thunderbird, both are garbage, and until the web based clients offer reliable mail rules I'm not interested.

[Aaron Johnson]

04:53 PM on 05/22/2011

Mr. Ballmer should just make a graceful exit from Microsoft, merge with IBM and call it Jumbo-IBM. I am quite confident an FCC commissioner or some other regulatory body could be bribed and offered a boardroom seat to allow this mega-merger to go through.

[jgeurian21]

08:20 PM on 05/22/2011

I know. I mean it isn't like under Balmer created and sell on of the most popular gaming consoles in the world. Or that under Balmer MS didnt create a billion dollar online streaming service with millions of members. Or that under Balmer MS got the record for the fastest selling electronic device in the history of the world. Or that under Balmer MS sold 7 copies of Win 7 every second, the fastest selling piece of software in the world. Oh wait....that all did happen. Well it isn't like they make any money. Oh wait....MS posted 30%+ increase in profits. Dang....MS sounds like a dead company to me.

[happymomof3]

08:05 PM on 05/23/2011

Oh, you're right. But I'm still waiting for all that to translate to increased stock value.

[dtrobert]

07:19 AM on 05/22/2011

Microsoft's decline continues, because as a company they insist on everything revolving around MS Office. They are so bound to that platform as a core revenue stream, that they are unable to take advantage of any new development in the software industry.

For example, Windows Phone 7 had to wait until MS Office could be ported to it in some form. But then it was too little, too late.

The reality is that no one really uses MS Office. A lot of corporations buy licenses for it by default, never actually looking into whether their employees use it to any real extent. Most users only ever touch Outlook. A few use PowerPoint. Very few use Word or Excel to actually produce documents anymore; more use it to *read* documents than to create them. A company could easily do without the whole suite, and buy only Outlook, except for those few people that actually use the other piece of the suite.

So Microsoft's vaunted cash cow is really only a Potemkin Village. CTOs continue to buy it because they think they must, not because they actually need it. And the day is fast approaching when those CTOs will retire...

And then what will poor Microsoft do?

So Microsoft is in serious need of a deep re-alignment, and that cannot happen with a bean-counter like Ballmer at the helm.

[tim0202]

02:07 PM on 05/22/2011

well, you started off good. "The reality is that no one uses MS Office." Wrong. "Most users only ever touch Outlook" You must work for a very small company.

[mspink]

06:34 AM on 05/23/2011

Oh Rly? What are they using? Lotus Notes? Open Office? Gee--lots of companies use Office.

[oldstuff]

04:05 AM on 05/22/2011

What does IBM do? I used to know, but not anymore.

[dhinds]

08:33 PM on 05/22/2011

International business Machines created the PC, contracted Bill Gates to supply a OS (which Gates purchased from someone else, cheap) and let it be cloned.

The value of their hardware and services has always surpassed the value of M$'s software sales which are now obsolete thanks to Linux, FireFox, OpenOffice etc. - all better than M$'s offerings, with better support and no cost.

(written using

[mspink]

06:38 AM on 05/23/2011

Then they short shrifted IBM when the rolled out Windows NT 3.1 after making the first OS/2 for IBM. NT ended up slaughtering OS/2.

[Muhd Hanis]

11:41 AM on 05/21/2011

Sure they are not going to sell
http://yuppygadget.com

[bill111]

09:20 AM on 05/21/2011

Market capital is nothing but an Imaginary number. That is not the true value of a stock. It's like a sale for 50 percent off of an item. If you do not know the price of the item on sale, than 50 percent off does not mean a thing.

[jflorish]

12:12 PM on 05/21/2011

Not really, stocks don't magically go up. They go up because of growth rates and beating earnings .... so market cap does tell you something about the stock.

[El Chingaso]

07:17 AM on 05/22/2011

Yeah, but who decides what are "true earnings" and, thus, "growth rates"? (Uh, that's why the P/E ratio is useless these days.) Earnings are subjective accounting outputs...

[shakylegs]

06:04 AM on 05/21/2011

I have one question to ask Microsoft.
Why, when MS has thousands of employees writing software, do we still have to load, Norton, McAfee, or some other third party virus protection programs on our computers?

[wilray]

07:52 AM on 05/21/2011

Microsoft has their own virus protection software. It's free. I believe the reason it is not bundled with Windows is an antitrust issue.

http://www.microsoft.com/en-us/security_essentials/default.aspx

[jflorish]

07:35 PM on 05/21/2011

There is also microsoft safety scan which is free on their site, which you can use for a one time scan each time you want to use it, if you don't want to run this permanently.

[CrookWatch]

12:36 AM on 05/21/2011

During the Anti-Trust nonsense Microsoft was accused of trying for world domination. That was the propaganda from Microsoft competitors. That hardly seem likely and here is some evidence. It wasn't Microsoft customers wanting Anti-Trust and while they played hardball they were certainly nowhere near the toughest. Other corporation are far worse and surprise surprise no Anti-Trust. The result from Anti-Trust didn't make all the much real world difference to Microsoft anyway. IBM finally got their act together and gained but it wasn't be cause Microsoft was severely damaged by Anti-Trust. Although, Vista wasn't Microsoft's best product. Contrary to many people beliefs Windows 7 isn't Vista SP3 because it was rewritten and doing nicely. Vista wasn't scalable but Windows 7 and later is and has a bright future.

[jt1980]

01:49 AM on 05/21/2011

Microsoft DID misbehave back then. Let's not rewrite history.

[CrookWatch]

04:14 AM on 05/21/2011

Nothing worthy of an Anti-Trust trial. Get real!

[barrada nicto]

06:06 AM on 05/21/2011

Massively. Without their illegal, monopolistic practices they wouldn't be anywhere near the company they are today.

[jflorish]

12:16 PM on 05/21/2011

If it wasn't for antitrust, you would all be using IE only because Microsoft would make it so other browsers wouldn't run. Then you would all go to Microsoft only sites, because IE would default to all their sites for news and search. Microsoft was a crooked company that would give away free items just to kill other companies like they did with Netscape. It's like walmart giving everything away free for a week to kill all competition because they can afford it.

[BlakeDynamo]

02:56 PM on 05/21/2011

Oh, you mean like Google does today with their free to consumer products that put paid for products out of business all the while Google makes billions on the back-end with ads and still claims the high road?

Or do you mean like Apple with their super agressive control of the iPod connector that monopolizes the music market so that other MP3 players are forever relegated to a headphone jack plugin that won't allow any of the control that Apple can get?

Business is business. Most companies do this kind of stuff. Microsoft just pissed off the wrong people I guess. Apple and Google seem to skate by ok doing similar stuff.

[thepoliticalcat]

12:35 AM on 05/21/2011

Guess I'd better sell any stock I own in MS. This is a GOOD day.

[jflorish]

12:16 PM on 05/21/2011

If you have been holding that stock the past 8 years then you could have done better putting it under the mattress :)

[macmanchgo]

12:05 AM on 05/21/2011

Used to be you could always find comments on articles like these saying Windows is a better operating system than OSX... Where have all the windows lovers gone....

[Lordcron]

05:20 AM on 05/21/2011

We're still here. We know that it's only a matter of time before you find out how Apple's bleeding you dry. Everything they make is very locked and closed and forces you to upgrade to something else that never quit meets industry specs. Apple products always miss the mark but the pretty factor blinds people.

It's just a matter of time.

[dtrobert]

07:23 AM on 05/22/2011

Apple is not Microsoft's competitor. Apple's business model works because it's far more flexible than Microsoft's. Yes, they may try to lock you in, but overall they've adapted far better to the move to Web-based apps than Microsoft did. And as the apps move to the web, the OS is less and less important. So I'd rather be with Apple, which is moving with the flow, rather than Microsoft which is desperately trying to stem it.

[barrada nicto]

06:08 AM on 05/21/2011

Since Apple dumped their OS completely and rebuilt with Mach/Unix they have a much better OS than Windows. But, alas, it's still Apple. Overpricing and controlling the hell out of every aspect of their market.

[elbeas]

09:44 AM on 05/21/2011

Windows 7 does everything I need it to and makes fairly efficient use of resources for a multiple application working environment, web, print and 3D. The main problem is it works best as a clean install and some applications MUST (for emphasis only - not shouting) be created for 7 to avoid creeping errors. There are workarounds for older application versions. After a few registry errors I'm not anxious to put that combination to another test.

[zdubchi]

11:17 PM on 05/20/2011

You can't keep putting out crap products and failures and expect to not have it catch up to you.

[jgeurian21]

08:08 PM on 05/22/2011

I didn't know that creating things like Kinect, which is the fastest selling electronic device in the history of the world, would be a "crap product". Then again MS's entertainment division had a 14% increase in profits and a 60% increase in revenue. I mean clearly "crap" products.