Microsoft Named Top-Tier Software Vendor by APPS RUN THE WORLD in the APPS TOP 500 Market Report

Microsoft Strengths, Domain Expertise, and Key Differentiators

Microsoft’s strategic investment of over $13 billion in OpenAI has meant early-mover advantages in generative AI, including exclusive integration rights and Azure-first infrastructure access. However, as OpenAI moves toward reclassifying as a public benefit corporation, a structure balancing profit with social responsibility, a restructured agreement is emerging as a necessity. Microsoft may relinquish a portion of its equity stake in OpenAI in exchange for extended access to future innovations beyond 2030, when the current partnership framework expires. This shift reflects a recalibration of interests; Microsoft is prioritizing long-term technological access and commercial alignment over fixed ownership.

In March 2023, Microsoft introduced Microsoft 365 Copilot, bringing next-generation AI capabilities to its workplace productivity tools. By combining large language models (LLMs) with business data and Microsoft 365 apps, Copilot enhances creativity, productivity, and skills. This innovative tool empowers users to maintain control over their work, enabling them to decide what to keep, modify, or discard. Integrated seamlessly into everyday apps like Word, Excel, PowerPoint, Outlook, and Teams, Microsoft 365 Copilot enhances collaboration and productivity, allowing users to focus more on essential tasks and less on administrative work.

Microsoft Recent Developments

In 2024 and 2025, Microsoft significantly enhanced its Viva platform by deeply integrating Copilot, its generative AI assistant, into several key Viva modules, specifically Viva Amplify, Viva Glint, and Viva Learning.

Microsoft has committed massive capital spending on AI datacenters. In January 2025 it announced plans to invest about $80 billion in FY2025 to build out AI-enabled data centers for training and running AI models.

In 2024, Microsoft significantly expanded its AI capabilities through a $650 million agreement with Inflection AI, a prominent startup founded by DeepMind veterans Mustafa Suleyman and Karen Simonyan. The deal consisted of two strategic elements: first, Microsoft hired the majority of Inflection's technical team, including both founders, in a major “acqui-hire” that now forms the backbone of its newly created consumer AI division, and second, Microsoft secured licensing rights to Inflection’s advanced foundation models, including Inflection-2, to power its own consumer-facing AI applications across platforms such as Windows and Microsoft 365.

Microsoft Mergers and Acquisitions (M&A) Activities

Microsoft has not made significant acquisitions in the enterprise applications market since its purchase of Nuance. In fact, it divested Metaswitch for its telco offerings in early 2025 to focus more sharply on core cloud and AI competencies.

The acquisition of Nuance Communications for $19.7 billion in 2021 marked a major step in conversational AI, particularly for healthcare and regulated industries. Further purchases like Fungible, which develops specialized data processing units to accelerate Azure performance, and Lumenisity, a company focused on optical networking, underscore Microsoft’s commitment to enhancing its cloud backbone and AI capabilities. Complementing this, smaller acquisitions in security (RiskIQ, ReFirm Labs), analytics (Oribi, Minit), and productivity tools (Clipchamp, Ally.io) have bolstered Microsoft’s comprehensive platform offerings for enterprise customers.

Microsoft Customers in ARTW Customer Database

Leveraging a rigorous data-centric research methodology, APPS RUN THE WORLD asks the simple question: Who’s buying Microsoft applications and why? And we provide the answers – supported by decades of research – to our clients around the world. Our Customer database has over 100 data fields that detail company usage of Microsoft and other enterprise apps by function, customer size, industry, location, implementation status, partner involvement, Line of Business Key Stakeholders and IT decision makers contact details. List of Verified Microsoft Dynamics 365, Microsoft Dynamics AX, Microsoft Dynamics CRM Online, Microsoft Dynamics NAV, Microsoft Dynamics SL, Office 365, Linkedin, Microsoft Viva customers.

Microsoft Key Enterprise and Cloud Applications

Microsoft Dynamics 365, Microsoft Dynamics AX, Microsoft Dynamics CRM Online, Microsoft Dynamics NAV, Microsoft Dynamics SL, Office 365, Linkedin, Microsoft Viva

Microsoft Revenues, $M:

Microsoft Revenue Breakdown By Type, $M:

Microsoft Enterprise Applications Revenues By Functional Markets, $M:

Microsoft Enterprise Applications Revenues By Verticals, $M:

Microsoft Revenues By Region, $M

Microsoft Direct vs Indirect sales

Microsoft Customers - Breakdown by Geo, Size, Vertical and Product

List of Verified Microsoft Customers

No. of Microsoft Customers: 250000

No. of Microsoft Enterprise Applications Customers: 250000

No. of Microsoft Cloud Customers: x

No. of Microsoft Cloud Subscribers: 120 million

Microsoft Dynamics 365 Business Central has surpassed 40,000 customers, reflecting strong adoption among small and mid-sized businesses seeking a modern, cloud-based ERP solution. In the enterprise segment, Dynamics 365 Finance, Supply Chain Management, and Commerce collectively serve around 4,500 customers, positioning Microsoft as a credible player in the upper mid-market and large enterprise ERP space. Among its legacy ERP products; Dynamics GP, Dynamics AX, and Dynamics SL, Microsoft maintains a substantial installed base of over 80,000 customers.

Microsoft has seen significant momentum in its security business, with its customer base expanding to 1.2 million organizations as of 2024, up from 650,000 in early 2022 and 400,000 in early 2021. A standout performer in Microsoft’s security portfolio is Microsoft Sentinel, its cloud-native SIEM (Security Information and Event Management) platform. Sentinel now boasts over 20,000 customers, up from 15,000 in 2023.

Furthermore, Microsoft now boasts more than 60,000 Azure AI customers, with over one-third joining Azure in the past 12 months, indicating continued momentum and adoption of its cloud services.

Microsoft Market Opportunities, M&A and Geo Expansions

Microsoft Cloud revenue grew 23% year-over-year, reaching $137.4 billion, a clear indicator of sustained enterprise demand and successful expansion of Azure, which led server products and services to a 22% gain, including 30% growth in Azure and related cloud services.

Office Commercial revenue rose 14%, largely due to a 16% increase in Office 365 Commercial, reflecting healthy seat growth and upsell to higher-value SKUs. On the consumer side, Microsoft 365 now boasts 82.5 million subscribers, driving a 4% increase in Office Consumer revenue , modest growth but reflective of a maturing market.

Dynamics products delivered 19% growth, with Dynamics 365 accelerating at 24%, highlighting increasing customer investment in cloud-based CRM and ERP. Windows revenue rose 8%, with OEM licensing up 7% and Commercial products and cloud services up 11%, suggesting a modest recovery in the PC market and resilient enterprise demand. Devices revenue declined 15%, consistent with broader hardware market weakness.

Microsoft Risks and Challenges

Microsoft's Gen AI strategy carries tremendous opportunities and significant risks. Its alliance with OpenAI underscores the preemptive efforts on the part of Microsoft to build out Gen AI capabilities with the help of one of the fastest-growing upstarts in history.

On the other hand, it remains to be seen how Microsoft Copilot - aided by OpenAI LLM modeling work - would help offset any potential erosion in sales and utilization of its cash-cow productivity products - namely Word, Powerpoint and Excel, all of which could be rendered obsolete in the age of AI automation.

Microsoft's 2025 pricing changes of Copilot, which essentially represent a forced migration and upgrade of its 365 customers, could also backfire if they do not see enough and immediate value in leveraging Copilot.

The key question is whether some of Microsoft's established franchises could diminish overtime if Gen AI is capable of disrupting business workflows once and for all resulting in a lesser role for operating systems, office apps and even tools as coding becomes commoditized. At the same time, Microsoft faces stiff competition in generative AI from Google (Gemini, Vertex AI) and AWS (Bedrock, SageMaker). These rivals are heavily investing in similar tools and infrastructure. This competition could impact Microsoft’s pricing power, cloud growth, and developer adoption of its Copilot and Azure AI services.

Microsoft Viva continues to evolve as a comprehensive employee experience platform, integrating AI capabilities and expanding its suite of tools to enhance communication, engagement, and well-being across organizations. The platform's adoption by major companies like Domino’s, Dell Technologies, PayPal, and Avanade underscores its effectiveness in fostering a connected and productive workforce. However, the ongoing legal challenge with Veeva Systems over branding could impact future marketing and branding strategies.

Microsoft Ecosystem, Partners, Resellers and SI

Microsoft’s recent strategic partnerships underscore its aggressive positioning as a platform enabler in the evolving AI and multi-cloud ecosystem. The deepened alliance with OpenAI is foundational, fueling product innovations like Copilot across Microsoft 365, Azure, and GitHub. This not only differentiates Microsoft’s offerings but also embeds generative AI capabilities into mainstream enterprise workflows. The multi-cloud pact with Oracle, enabling Oracle Database services to run natively on Azure, signals a pragmatic shift toward customer centric interoperability, particularly for mission critical workloads.

Moreover, Microsoft’s strengthened collaborations with SAP, Adobe, and ServiceNow indicate a clear intent to consolidate its influence in enterprise SaaS and digital experience platforms. By integrating Copilot and Azure OpenAI into these partners’ applications, Microsoft is positioning Azure as the go-to AI infrastructure layer. Concurrently, partnerships with NVIDIA (for AI infrastructure), Meta (for immersive productivity and open AI models), and others expand Microsoft's presence in verticals ranging from immersive tech to high-performance AI computing. Collectively, these alliances support Microsoft's goal of anchoring itself at the core of digital transformation agendas across industries.

The Microsoft Partner Network, now rebranded as the Microsoft AI Cloud Partner Program, represents one of the largest and most diverse partner ecosystems in the technology industry. It includes over 400,000 companies globally, ranging from global system integrators, and independent software vendors to cloud solution providers, resellers, and managed service providers.

Research Methodology

Data used in research reports are derived from publicly available documents, continuous surveys of applications vendors, customers, resellers, Independent Software Vendors, systems integrators and other verifiable sources.

Vendor shares and market forecast results are based on a combination of existing databases as well as demand side and supply side research conducted throughout the year with validation from vendors, customers, channel partners and documentations such as earnings releases and 10Q and 10K filings, vertical industry studies, regional and country-level statistics from public and private institutions(i.e. colleges, universities, government agencies and trade associations).

For additional information on our methodologies, here's the link: