Microsoft Corporation: “Data Privacy” Could Send MSFT Stock Soaring

MSFT StockImportant Branding for Microsoft Stock (MSFT)

Microsoft Corporation (NASDAQ:MSFT) is updating its “Windows 10” software to put a greater focus on data privacy, something which it hopes will become the company’s trademark. These changes are more than cosmetic—they could spark a bullish run on Microsoft stock (MSFT stock).

The new controls on privacy come in response to changing consumer preferences. Microsoft’s proposed “privacy dashboard” allows customers to choose what data is being collected, and tutorials on how to track their choices. It gives them the power to opt out.

These features are still in beta-testing, but they could help Microsoft brand itself as both secure and socially conscious.

“Many of you have asked for more control over your data, a greater understanding of how data is collected, and the benefits this brings for a more personalized experience,” wrote Terry Myerson, head of Microsoft’s Windows and devices group, in a Windows blog post. “Based on your feedback, we are launching two new experiences to help ensure you are in control of your privacy.” (Source: “Our continuing commitment to your privacy with Windows 10,” Windows, January 10, 2017.)

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High-profile security breaches—at Yahoo! Inc. (NASDAQ:YHOO), the Democratic National Committee, and Sony Pictures (part of Sony Corp (ADR) (NYSE:SNE))—have made people increasingly eager to keep their information private. Polls show that 90% of people think that “controlling what information is collected about them is important.” (Source: “Survey Says Americans Don’t Trust Government, Tech Companies on Privacy and Surveillance,” Security, May 20, 2015.)

As a result, they are likely to favor companies that put their privacy first, which, to be honest, are few and far between. Microsoft understands that many customers crave trust, and it is acting accordingly. This is a crucial part of the company’s business strategy in more ways than you can imagine.

For instance, MSFT stock is trading at record highs for one big reason: “Azure.”

Azure is Microsoft’s cloud computing division. Revenue from this division has climbed more than any other division within the company; 116% year-over-year, in fact. This is because Microsoft decided to place privacy and customer preferences at the heart of its strategy. (Source: “Earnings Release FY17 Q1,” Microsoft Corporation, October 20, 2016.)

Most other cloud computing companies build their data centers and lease out storage space to customers. Call that the Amazon.com, Inc. (NASDAQ:AMZN) strategy. But Microsoft wanted to offer a mix of public and private data centers, so that customers with sensitive data can rest assured knowing their servers are located on their premises.

That may seem small, but it can have a huge effect on Microsoft stock (MSFT stock). Why else would General Electric Company (NYSE:GE) move all of its industrial software applications onto Azure? Why would it route all the apps it sells through Azure? It’s because the company values security.

So, while the small tweaks to Windows 10 may seem insignificant, it is emblematic of what makes MSFT stock so valuable. This company sees the giant “privacy gap” in the tech market, and it knows that bridging that gap can reap it enormous rewards. So it’ll do it.