Microsoft’s PowerApps will enable users to create mobile apps
Earlier in this series, we discussed Microsoft’s (MSFT) probable launch of the Surface Phone in 2016. In late November 2015, Microsoft launched PowerApps, a new enterprise mobile app creation service. PowerApps lets users create mobile apps as needed and connect to existing business systems in a secure way. They can then share these newly developed apps with their coworkers. Microsoft shared that PowerApps can connect to and use data from Office 365, Dynamics CRM, Dropbox, Salesforce, and OneDrive, and connect with SharePoint, SQL Server, Azure, Oracle databases (ORCL), and SAP (SAP).
With PowerApps, Microsoft has enabled non-programmers and non-coders to develop professional-level apps. Salesforce’s (CRM) Lightning App Builder is another app in this space.
Enterprise mobile app development
The launch of PowerApps holds importance, as the enterprise mobile apps market is expected to surge significantly. According to a recent Ericsson Mobility report, mobile smartphone usage, which stood at around 2.6 billion people in 2014, will increase to 6.4 billion by 2021. This is outlined in the chart above.
Strategy Analytics expects the mobile app market to be worth $63 billion by 2020. Gartner is of the opinion that by 2017, “market demand for mobile app development services will grow at least five times faster than internal IT organizations’ capacity to deliver them.”
Investors who wish to gain exposure to Microsoft could consider investing in the iShares Russell 1000 Value ETF (IWD) and the PowerShares QQQ Trust, Series 1 ETF (QQQ). Though IWD and QQQ invest 2.0% and 8.4% of their holdings in Microsoft, they have exposure of 3.4% and 28.4%, respectively, to application software.