Microsoft Corporation (MSFT) To Dump $5 Billion Into Internet Of Things (MSFT)

Microsoft Corporation (NASDAQ:MSFT) is betting heavily on connected solutions for a wide range of devices.

The software giant announced this week that it would invest $5 billion in so-called Internet of Things (IoT) initiatives over the next four years, during which it anticipates people’s lives will be transformed by a wide variety of connected devices in their homes, workplaces, and on the go.

Microsoft explained the move in a company blog post:

We’re now seeing the kind of increased adoption and exponential growth that analysts have been forecasting for years, and we’re just getting started. A.T. Kearney predicts IoT will lead to a $1.9 trillion productivity increase and $177 billion in reduced costs by 2020. This effect will be pervasive, from connected homes and cars to manufacturers to smart cities and utilities—and everything in between.
This increased investment will support continued innovation in our technology platform, as well as supporting programs. We will continue research and development in key areas, including securing IoT, creating development tools and intelligent services for IoT and the edge, and investments to grow our partner ecosystem. Customers and partners can expect new products and services, offerings, resources and programs.

The company’s current IoT partners include heavy hitters like Kohler, Chevron, United Technologies, and Johnson Controls, with several more slated to join the lineup soon.

Microsoft Corporation shares rose $0.41 (+0.44%) in premarket trading Thursday. Year-to-date, MSFT has gained 8.44%, versus a -0.84% rise in the benchmark S&P 500 index during the same period.

MSFT currently has a StockNews.com POWR Rating of B (Buy), and is ranked #9 of 65 stocks in the Software – Application category.