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Many investors still think of the world's largest software firm, Microsoft Corp. (Nasdaq: MSFT), as one rooted in PCs and business software.
But this is no longer the Microsoft of Bill Gates and Steve Ballmer.
Instead, CEO Satya Nadella is using Microsoft piles of cash – $92 billion – to move the Redmond, Wash.-based company into technologies, like virtual reality (VR), that are both cutting-edge and poised for hypergrowth. Consumer VR is a field that could expand to at least $5.2 billion – some 58-fold – by 2018.
Nadella has told colleagues and the media he believes VR is the next big phase in consumer technology. Hence Microsoft’s Project HoloLens, an "augmented reality" device, containing an onboard camera and a computer hooked up to 18 sensors that transmit a tidal wave of data every second. VR headsets and software – now that the technology meets consumer demands – fit right in with our video games, social networks, and mobile devices.
Microsoft's foray into virtual reality is not a stretch from the company's core business – but the right thing to do. It shows the company still has the power to innovate with best of them – and offer investors great long-term gains.