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MicroStrategy

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MicroStrategy Incorporated
Company typePublic
IndustryBusiness intelligence and mobile software
Founded1989; 35 years ago (1989)
Founders
HeadquartersTysons Corner, Virginia, U.S.
Key people
RevenueDecrease US$496 million (2023)
Increase US$429 million (2023)
Total assetsIncrease US$4.76 billion (2023)
Total equityIncrease US$2.16 billion (2023)
Number of employees
1,934 (2023)
Websitemicrostrategy.com
Footnotes / references
[1]

MicroStrategy Incorporated is an American development company that provides business intelligence (BI), mobile software, and cloud-based services. Founded in 1989 by Michael J. Saylor, Sanju Bansal, and Thomas Spahr, the firm develops software to analyze internal and external data in order to make business decisions and to develop mobile apps. It is a public company headquartered in Tysons Corner, Virginia, in the Washington metropolitan area.[2] Its primary business analytics competitors include SAP AG Business Objects, IBM Cognos, and Oracle Corporation's BI Platform.[3][4] Saylor is the Executive Chairman and, from 1989 to 2022, was the CEO.[5][6][7]

Since 2020, the company's securities are widely considered to be a bitcoin proxy due to MicroStrategy's holdings of the cryptocurrency.

History

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Saylor started MicroStrategy in 1989 with a consulting contract from DuPont, which provided Saylor with $250,000 in start-up capital and office space in Wilmington, Delaware. Saylor was soon joined by company co-founder Sanju Bansal, whom he had met while the two were students at Massachusetts Institute of Technology (MIT).[8] The company produced software for data mining and business intelligence using nonlinear mathematics,[5] an idea inspired by a course on systems-dynamics theory that they took at MIT.[9]

In 1992, MicroStrategy gained its first major client when it signed a $10 million contract with McDonald's. It increased revenues by 100% each year between 1990 and 1996.[8] In 1994, the company's offices and its 50 employees moved from Delaware to Tysons Corner, Virginia.[10]

On June 11, 1998, MicroStrategy became a public company via an initial public offering.[11]

In 2000, the company founded Alarm.com as part of its research and development unit.[12]

On March 20, 2000, after a review of its accounting practices, the company announced that it would restate its financial results for the preceding two years.[13] Its stock price, which had risen from $7 per share to as high as $333 per share in a year, fell to $120 per share, or 62%, in a day in what is regarded as the bursting of the dot-com bubble.[14]

In December 2000, the U.S. Securities and Exchange Commission brought charges against the company and its executives.[15] A lawsuit was subsequently filed against MicroStrategy and certain of its officials over fraud.[16] In December 2000, Saylor, Bansal, and the company's former CFO settled with the SEC without admitting wrongdoing, each paying $350,000 in fines. The officers also paid a combined total of $10 million in disgorgement. The company settled with the SEC, hiring an independent director to ensure regulatory compliance.[17][18]

In February 2009, MicroStrategy sold Alarm.com to venture capital firm ABS Capital Partners for $27.7 million.[12] The company introduced OLAP Services with a shared data set cache to accelerate reports and ad hoc queries.[19] In 2010, the company began developing and deploying business intelligence software for mobile platforms, such as the iPhone and iPad.[20]

In 2011, the company expanded its offerings to include a cloud-based service, MicroStrategy Cloud.[21]

In 2013, MicroStrategy sold Angel to Genesys Telecommunications Laboratories for $110 million.[22][23]

In January 2014, the company announced a new feature of the platform called PRIME (Parallel Relational In-Memory Engine), co-developed with Facebook.[24]

In October 2014, the company announced plans to lay off 770 employees, a month after reducing Saylor's salary from $875,000 to $1 at his request.[25]

In June 2015, MicroStrategy announced the general availability of MicroStrategy 10.[26]

In the fall of 2018, the company released MicroStrategy 11.[27]

In January 2019, MicroStrategy announced the general availability of MicroStrategy 2019.[28]

In February 2020, the company announced MicroStrategy 2020.[29]

Saylor resigned as CEO effective August 8, 2022. Phong Le, who had been president, succeeded him. Saylor remains the Executive Chairman of MicroStrategy. In a press release announcing the transition, Saylor said that he would focus on the company's bitcoin acquisition strategy and that Phong would manage overall corporate operations.[7]

Bitcoin purchases

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In August 2020, MicroStrategy invested $250 million in bitcoin as a treasury reserve asset, citing declining returns from cash, a weakening dollar, and other global macroeconomic factors.[30][31] The company went on to make several additional large purchases of bitcoin; as of September 19, 2022, MicroStrategy and its subsidiaries held approximately 130,000 BTC, acquired at an aggregate purchase price of $3.98 billion at an average purchase price of $30,639 per bitcoin. Saylor is the main driver behind this strategy.

On the company's quarterly earnings call on May 3, 2022, MicroStrategy CFO Phong Le stated that the company would face a margin call if bitcoin's price fell to about $21,000. A margin call would obligate the company to sell some of its bitcoin holdings. Le stated that the company could add more collateral to its loan to avoid such a situation.[32] After bitcoin's price fell to about $20,800 in June 2022, the company said that it had not received a margin call and that it had enough capital to withstand further volatility.[33] On December 22, 2022, MicroStrategy sold 704 BTC, which represented their first time selling any bitcoin, for an amount of around $11.8 million.[34]

On September 25, 2023, MicroStrategy announced that, during the period between August 1, 2023, and September 24, 2023, MicroStrategy and its subsidiaries acquired approximately 5,445 bitcoins for approximately $147.3 million in cash, at an average price of approximately $27,053 per bitcoin, inclusive of fees and expenses.

As of December 8, 2024, MicroStrategy was reported to own 423,650 bitcoins, worth $42.43 billion, and is the largest corporate holder of the asset. MicroStrategy purchased 149,880 bitcoins in the month beginning on November 11, 2024.[35] On the strength of this asset, MicroStrategy was included in the Nasdaq-100 effective December 23, 2024, although it will need to survive a classification review in April 2025 to determine if it should be categorized as a financial firm.[36]

Controversies

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Following defendant MicroStrategy Inc.'s announcement on March 20, 2000, that it had significantly overstated its revenue for the years 1998 and 1999, approximately two dozen class action securities fraud actions were filed in this district against MicroStrategy and other defendants. [1]

On August 31, 2022, the Attorney General for the District of Columbia sued Saylor for tax fraud, accusing him of illegally avoiding more than $25 million in D.C. taxes by pretending to be a resident of other jurisdictions. MicroStrategy was accused of collaborating with Saylor to facilitate his tax evasion by misreporting his residential address to local and federal tax authorities and failing to withhold D.C. taxes.[37] MicroStrategy said the case is "a personal tax matter involving Mr. Saylor" and called the claims against the company "false" and it would "defend aggressively against this overreach."[38] In June 2024, Saylor and MicroStrategy reached a $40 million settlement agreement with the District of Columbia.[39]

Products

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MicroStrategy Analytics
Developer(s)MicroStrategy
Stable release
MicroStrategy 2019 / January 7, 2019; 5 years ago (2019-01-07)[28]
Operating systemMicrosoft Windows, Linux, AIX (no longer supported), Solaris (no longer supported)
TypeBusiness intelligence
LicenseTrialware
Websitewww.microstrategy.com/us/platform

MicroStrategy 2020 is the latest platform release of the company's business intelligence software.[29]

MicroStrategy 2019, the prior platform release, attempted to improve connectivity to data sources and applications and allow for easier mobile application development. it also offered Bluetooth identity detection and voice.[27][28][40] The earlier suite of software, MicroStrategy 10, consisted of MicroStrategy Analytics, MicroStrategy Mobile, and Usher. MicroStrategy 10.10, released in December 2017, added MicroStrategy Workstation.[41] It uses business intelligence and predictive analytics to search through and perform analytics on big data from a variety of sources, including data warehouses, Excel files, and Apache Hadoop distributions.[42]

MicroStrategy Mobile, introduced in 2010, incorporates analytics capabilities to apps for iPhone, iPad, Android, and BlackBerry.[24]

Usher is a digital credential and identity intelligence product for organizations to control digital and physical access. It replaces physical badges and passwords with secure digital badges, and generates information on user behavior and resource usage.[43][44]

References

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  1. ^ "Microstrategy Form 10-K". U.S. Securities and Exchange Commission. 2024-02-15. Retrieved 2024-07-25.
  2. ^ Perez, Juan Carlos (January 21, 2008). "Customers Trust MicroStrategy's Independence". PC World.
  3. ^ Kanaracus, Chris (April 19, 2011). "Microstrategy Takes Aim at Self-service BI". PC World.
  4. ^ Howson, Cindi (February 14, 2013). "MicroStrategy Doubles Down On Mobile, Data Visualization". InformationWeek.
  5. ^ a b Jaffe, Harry (March 1, 2000). "The Seven Billion Dollar Man". Washingtonian.
  6. ^ "Microstrategy form 10-K". Microstrategy Investor Relations. 2020-02-13. Retrieved 2020-03-26.
  7. ^ a b Sigalos, MacKenzie (August 2, 2022). "MicroStrategy CEO Saylor moves to chairman role, focusing on strategy and bitcoin". CNBC. Retrieved August 9, 2022.
  8. ^ a b Glasser, Jeff (July 15, 1996). "From the Ground Up and Up". The Washington Post.
  9. ^ Salter, Chuck (March 31, 2000). "People and Technology - MicroStrategy Inc". Fast Company.
  10. ^ Leibovich, Mark (January 6, 2002). "MicroStrategy's CEO Sped to the Brink". The Washington Post.
  11. ^ Leibovich, Mark (August 9, 1998). "JOURNEY INTO THE SECRET HEART OF CAPITALISM". The Washington Post.
  12. ^ a b Takahashi, Dean (February 17, 2009). "Alarm.com buys out its owners for $27.7 million". VentureBeat.
  13. ^ Hilzenrath, David S. (March 22, 2000). "For MicroStrategy, A Matter of Timing". The Washington Post.
  14. ^ "MicroStrategy plummets". CNN Money. March 20, 2000.
  15. ^ "SEC Brings Civil Charges Against MicroStrategy, Three Executive Officers for Accounting Violations" (Press release). U.S. Securities and Exchange Commission. December 14, 2000.
  16. ^ Norris, Floyd (December 15, 2000). "MicroStrategy Chairman Accused of Fraud by S.E.C." The New York Times.
  17. ^ Lau, Debra (December 18, 2000). "Forbes Faces: Michael Saylor". Forbes.
  18. ^ Hilzenrath, David S. (December 15, 2000). "Saylor, Associates Settle Fraud Charges". The Washington Post.
  19. ^ "MicroStrategy Launches In-Memory Analysis Engine". Information Week. February 14, 2014.
  20. ^ Kayle, Alex (July 7, 2010). "iPad spells end for traditional BI". ITWeb.
  21. ^ Howson, Cindi (January 31, 2012). "MicroStrategy Cloud, Social And Mobile Bets Pay Off". InformationWeek.
  22. ^ "MicroStrategy Announces Sale of Angel Subsidiary" (Press release). PR Newswire. February 26, 2013.
  23. ^ "MicroStrategy To Sell Angel.com Unit To Genesys For $110M". Forbes. February 26, 2013.
  24. ^ a b "MicroStrategy Rolls Out Analytics Solutions for Cloud, Mobile Information-Driven Apps". Integration Developer News. Retrieved 2014-02-20.
  25. ^ Clabaugh, Jeff (October 9, 2014). "MicroStrategy slashes workforce by 20 percent". American City Business Journals.
  26. ^ Noyes, Katherine (June 4, 2015). "MicroStrategy 10 promises enhanced BI with more governance, security". CIO magazine.
  27. ^ a b Holak, Brian (January 8, 2019). "MicroStrategy 2019 platform touts 'zero-click' analytics". Tech Target. Retrieved April 2, 2019.
  28. ^ a b c Marshall, Mo (January 7, 2019). "MicroStrategy 2019 promises voice queries, hyper-targeted intelligence". Venture Beat. Retrieved April 2, 2019.
  29. ^ a b "HyperIntelligence upgrades highlight MicroStrategy 2020". TechTarget. 2020-02-05. Retrieved 2020-03-26.
  30. ^ "MicroStrategy buys $250M in Bitcoin as CEO says it's superior to cash". Washington Business Journal. 2020-08-11. Retrieved 2020-08-11.
  31. ^ "MicroStrategy Buys $50 Million Worth Of Bitcoin, Topping Up Holdings To $766M". 5 December 2020.
  32. ^ Fox, Matthew. "Microstrategy said it would face a margin call and be forced to sell some of its crypto if bitcoin falls to $21,000". Markets Insider. Retrieved 2022-05-06.
  33. ^ Westbrook, Tom (2022-06-15). "MicroStrategy scotches 'margin call' fears, says can withstand volatility". Reuters. Retrieved 2022-06-15.
  34. ^ MicroStrategy Incorporated MicroStrategy
  35. ^ Macheel, Tanaya (2024-12-14). "Bitcoin proxy MicroStrategy to join the Nasdaq 100 and heavily traded 'QQQ' ETF". CNBC. Retrieved 2024-12-15.
  36. ^ "MicroStrategy joins Nasdaq-100 ranks, but its stay could get cut short". DL News. Retrieved 2024-12-15.
  37. ^ "AG Racine Sues DC-Based Billionaire Michael Saylor & Software Company Microstrategy for Evading More Than $25 Million in District Taxes". oag.dc.gov. Retrieved 1 September 2022.
  38. ^ Feiner, Lauren (31 August 2022). "MicroStrategy Chair Michael Saylor accused of evading $25 million in taxes by DC attorney general". CNBC. Retrieved 1 September 2022.
  39. ^ Hirsch, Lauren (3 June 2024). "MicroStrategy and Its Founder to Pay $40 Million in Tax Fraud Lawsuit". New York Times. Archived from the original on 28 November 2024.
  40. ^ Brust, Andrew (January 7, 2019). "MicroStrategy 2019 introduced "HyperIntelligence" contextual BI". ZDNet. Retrieved April 2, 2019.
  41. ^ Sargent, Jenna (December 11, 2017). "MicroStrategy 10.10, Talend's new developer courses, and UC Berkeley future learning robots". SD Times.
  42. ^ "Zettaset adds BI connector to Hadoop tool". ITWeb. January 29, 2014.
  43. ^ Overly, Steven (April 14, 2013). "MicroStrategy's office of the future includes mobile identity and cybersecurity". The Washington Post.
  44. ^ Flook, Bill (October 2, 2013). "Michael Saylor on the iPhone 5s, mobile ID and the new 'biometric war'". American City Business Journals.
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