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Microsoft, Go Daddy Ink Deal

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Microsoft Corp. (MSFT - Free Report) recently inked a deal with GoDaddy in order to enable small business owners to access Office 365 more easily. Users can select any one of the three Office 365 plans that will be connected to their domain names.

Go Daddy is a privately-held firm and mainly functions as an Internet domain registrar and a web hosting company. It started out in 1997 as Jomax Technologies and later went on become Go Daddy Group Inc.

As per the deal, all the small businesses that have signed up with Go Daddy will now be able to access their official mail connected to their domains. Additionally, all other Microsoft productivity solutions will also be made available to them via Office 365.

Office 365 offers business-class email, shared calendars, instant messaging, online conferencing and access to the most up-to-date Office documents. These capabilities are delivered as a cloud service available to users wherever they are, online or offline and across a variety of devices. Additionally, Office 365 includes built-in security features that help deflect malware, spam, phishing attacks and other threats.

Microsoft believes that this deal will widen its reach and eventually increase its revenues and profitability going forward. Go Daddy, on the other hand, expects this strategic union to save time of its users, thus making its offerings more attractive and driving revenues.

Microsoft remains one of the best positioned software vendors, given its wide range of products, emerging markets strength, continued technology deployment at data centers and growth in cloud computing. In the last reported quarter, cloud services gained momentum, with commercial cloud revenues soaring 103% year over year. Office 365 and Azure grew in triple digits. Dynamics CRM also contributed to the strength in cloud revenue because two-thirds of customers moved to the cloud.

However, the popularity of smartphones and tablets from Apple (AAPL - Free Report) , Hewlett Packard (HPQ - Free Report) and Google have been cannibalizing its core PC market. Microsoft is targeting Apple’s devices instead of Google’s because of the margins involved. This seems to be a good idea, though there is some risk involved.

Currently, Microsoft has a Zacks Rank #4 (Sell).

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