MSFT: SUPPLY CHAINS BACK

Satya Nadella suggested Microsoft is in a better financial position than it was in the previous recession. He joined the company in 1992 and replaced Steve Ballmer as Microsoft’s CEO in 2014.

Microsoft’s Azure infrastructure has held up with increased traffic with the current coronavirus problems. Web based companies are faring better than retail at present.

While southern China is back to work, people there are still wary of coronavirus and companies are taking steps to make sure everyone is safe. With global supply chains recovering the only concern is demand.

Satya Nadella said his daughters helped him at home from working on a bed to having a proper desk to work at etc.

Microsoft has noticed more and more teams are working at Microsoft and they are noticing this generally with other companies.

In elementary economics there is an idea call elasticity. Lettuce is the standard example, it tends to not last long so it may be expensive when it first came in but as it wilts the price falls to motivate people to overlook the problem. More lettuce is sold at 97 cents vs $1.97. Both supply and demand are elastic but the curves may be unusually steep or flat.

Semiconductors are a standard example for elasticity in supply. The supply curve is very stepwise as a new foundry is expensive and when one comes on line the supply of hardware increases driving prices down.

With supply and demand curves, the point where they meet is called the equilibrium. Generally equilibrium is dynamic as carrots come to market vs how fast they spoil on grocery shelves etc.

Personal computers are more expensive than carrots but prices are much lower than they historically have been. This has made it possible for private citizens to have a machine and with the internet it has had a profound impact on the global economy.

Microsoft has also indicated that in May the focus will be on security updates and other updates are suspended until May. This may be pushed back depending on the status of coronavirus.

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