Microsoft Acquisitions: What It Buys and What It Pays, 2015-2025

Microsoft bought 59 software companies from 2015 to 2019 and three from 2023 to 2025, while its capital spending on cloud and AI infrastructure rose to $116bn in fiscal 2026. Across the period it completed 86 software acquisitions in our records, more than any other large product company in our ranking, and its filings show $141bn of cash spent on acquisitions in the ten fiscal years to June 2025, most of it in the years its largest deals closed.

Most of the companies it bought were small, and many now live inside a Microsoft product. That is the trade for a seller. Microsoft buys capability, a product, a team or a set of users worth more inside Microsoft than on its own, so it is a generous buyer when a product fills a gap in its roadmap and a demanding owner once the deal closes, when the product usually ends up under a Microsoft name. It can afford either size of deal, with $183bn of operating cash flow in the year to June 2026.

The software deals counted here include those made by LinkedIn, GitHub and ZeniMax and come from our deal records, built from Mergermarket and Microsoft’s announcements; game studios, hardware makers and IT services firms are counted separately. Spend and the accounting for the largest deals come from Microsoft’s 10-K filings.

Microsoft Subsidiaries and How Microsoft Is Organized

Microsoft reports three segments. Productivity and Business Processes holds Microsoft 365, Dynamics and LinkedIn. Intelligent Cloud holds Azure, the server products, GitHub and Nuance. More Personal Computing holds Windows, devices, search and advertising, and gaming, where ZeniMax and Activision Blizzard sit. Revenue reached $331.8bn in fiscal 2026, with about 223,000 full-time employees.

Smaller acquisitions join a Microsoft product team. A handful of large ones kept their names and run as businesses of their own:

LinkedIn and GitHub also buy companies themselves. LinkedIn made six acquisitions after Microsoft bought it, in sales technology, employee engagement, advertising data, talent mobility, marketing analytics and online learning, and GitHub made four, all developer tools. ZeniMax bought a game studio in Hungary in 2023. If you sell software to recruiters, marketers or developers, the first approach may come from one of these units.

How Many Companies Microsoft Acquires

Microsoft bought most in 2015, with 18 software acquisitions, and again in 2018 and 2021, with 12 each. From 2015 to 2019 it made 59, from 2020 to 2022 another 24, and from 2023 to 2025 three.

Each period has a theme. In 2015 and 2016 it bought mobile and productivity apps, among them a calendar, a to-do list and a smartphone keyboard. In 2018 it bought AI start-ups along with GitHub, and in 2019 mostly developer and cloud tools. In 2021 it bought security, collaboration and AI businesses, Nuance the largest of them. After the agreement to buy Activision Blizzard in January 2022, the count fell to four that year, one in 2023, zero in 2024 and two in 2025.

How Much Microsoft Spends on Acquisitions

Spending comes in waves. Microsoft’s cash flow statement shows $140.9bn spent on acquisitions, net of cash acquired, in fiscal 2016 to 2025, and four years account for $126bn of it, 89 percent: fiscal 2017, 2021, 2022 and 2024, the years in which LinkedIn, ZeniMax, Nuance and Activision Blizzard closed. In the other six years the line ran between $0.9bn and $6.0bn.

The smaller deals add up to modest sums by Microsoft’s standards. Across fiscal 2015, 2016 and 2018 to 2020, its filings put spending on acquisitions other than Mojang and GitHub at $7.2bn, paid almost entirely in cash.

Capital now goes elsewhere. Microsoft spent $115.9bn on property and equipment in fiscal 2026, which its 10-K ties to cloud growth and AI infrastructure, against $1.7bn on acquisitions. It has also committed $13.0bn of funding to OpenAI, which it accounts for as an equity investment, and its largest commitments since 2023 are minority stakes in AI model developers. For a seller, the money is plentiful; the open question is whether your product fits where Microsoft is spending it.

What Size of Company Microsoft Buys

An enterprise value is on record for 14 of the 86. The median is $158M, with an interquartile range of $100M to $438M, and two of the 14 were above $5bn. Disclosure follows size, so these figures describe the visible top of the range. The 72 unpriced deals include most of the apps, tools and small teams in the product areas below.

The typical target is a young company with a product Microsoft can put in front of its own customers. Target revenue is on record for 4 of the 86 acquisitions, and three of those four were making losses when Microsoft bought them. Microsoft’s announcements describe what the product and the team will add to a Microsoft product line, and a company that spends heavily on growth is well within its range.

What Microsoft Buys

The 86 software acquisitions, grouped by the market each company serves, with the deals outside software in the last row:

Beyond its 86 software acquisitions, our records show 19 more from 2015 to 2025: nine game studios and gaming platforms, among them ZeniMax and Activision Blizzard, four hardware makers, two IT services firms, LinkedIn and three other businesses.

Each area maps to a Microsoft product line: Azure for infrastructure, data and developer tools, Microsoft 365 and Teams for productivity, Defender and Entra for security, Dynamics and Power Platform for sales and business applications, Xbox for games. Microsoft’s announcements present the deals as additions to those lines and describe each target by what it will bring to the product.

The mix has shifted over time. Productivity apps cluster in 2015 and 2016, AI and developer tools in 2018 and 2019, and security in 2020 and 2021. The latest acquisitions are AI tools: Pi Labs, which builds tools to evaluate AI applications and agents, in 2025, and in 2026 Osmos, a data engineering company bought for Microsoft Fabric, and Fintool, an AI financial research tool for the Office team.

Where Microsoft Buys

Microsoft bought in 12 countries. The United States leads with 61 acquisitions, followed by Canada with 7, the United Kingdom with 5, Israel with 3, Australia and Germany with 2 each, and Finland, Hungary, Ireland, Italy, Slovakia and Sweden with one each.

The Canadian and British deals cover developer tools, automation, AI, apps and telecom network software, and two of the three Israeli deals were security and compliance businesses. Europe accounts for 13 acquisitions, spread from Ireland to Hungary, and the 25 deals outside the United States make up 29 percent of the total.

What Microsoft Pays: Acquisition Multiples

Microsoft discloses few prices. Of the 86 acquisitions, 14 carry an enterprise value, and two can be set against the target’s revenue: the takeover of a listed company and a private company whose accounts were filed in the UK. Two is below the five we need to publish a median, so treat what follows as two data points.

Both were priced above 15 times revenue, more than four times the median of 3.7x across the private software deals in our valuation research. EBITDA figures are too sparse for a comparison with the 19.0x median across private software deals, and the private company was making losses when Microsoft bought it.

The filings show where the money goes. Microsoft paid $136bn for its largest acquisitions, from LinkedIn in 2016 to Activision Blizzard in 2023, and it booked 70 percent of that as goodwill and 27 percent as identified intangible assets such as technology, customer relationships and brands. About 3 percent was tangible assets net of liabilities. Goodwill is the premium over everything that can be identified and valued, and Microsoft’s filings attribute it mainly to anticipated synergies from future growth: the price reflects what the business will do inside Microsoft.

For a smaller company, that logic carries both ways. A product that fills a gap in a Microsoft roadmap can command a price well above what its revenue alone would support, since the alternative for Microsoft is to build it. A product that Microsoft could build in a few quarters is likely to be priced as a team and its technology. Before the first conversation, establish which of the two you are, using the Software-Bewertungsmultiplikatoren for your segment as the floor.

How Microsoft Structures a Deal

Microsoft buys the whole company and pays in cash. Every one of the 86 was for 100 percent or an unstated full stake, and 13 of the 14 with a disclosed value were paid in cash. The filings describe the smaller acquisitions of fiscal 2018 to 2020 as substantially all paid in cash. GitHub, a stock transaction that included cash for vested employee equity, is the one disclosed exception.

Small deals sign and close together. Of the 72 acquisitions with a completion date, 56 closed on the day they were announced, and only 5 took longer than 60 days. Large deals take far longer and go through merger review: the largest took between five and 21 months to close. In the longest case, the UK competition regulator blocked the original agreement and cleared a revised one after Microsoft agreed to license the cloud streaming rights to the target’s games to Ubisoft, and the US Federal Trade Commission challenged the deal in court. Microsoft is also a designated gatekeeper under the EU Digital Markets Act, which obliges it to inform the European Commission of its acquisitions, including small ones.

Much of the value for founders and staff comes as Microsoft equity paid over time. In the GitHub deal, about $600M was accounted for outside the purchase price, mainly equity awards expensed over the period employees stay. For an owner who will join Microsoft, the retention package can matter as much as the price paid for the shares, and its vesting schedule decides how much of it you collect.

Microsoft also uses structures short of an acquisition. In March 2024 it hired most of the 70-person staff of the AI startup Inflection and paid $650M to license its technology, and the UK regulator treated that arrangement as a merger and cleared it. If your value lies mainly in your people, expect Microsoft to consider a license-and-hire offer alongside a purchase of your shares, and compare the two on what reaches you and your shareholders.

What Happens After Closing

Many acquired products become features. Wunderlist, the to-do list app Microsoft bought in 2015, was rebuilt by its own team as Microsoft To Do and shut down in May 2020, and two other apps bought in 2015 were shut down soon after the deal. The technology and the people move into a Microsoft product, and the brand fades.

The largest acquisitions kept their names and their own leadership for years, and then moved closer to the center. In August 2025 GitHub’s chief executive announced he would leave by the end of the year, Microsoft said it would leave the role unfilled, and GitHub’s leadership now reports into CoreAI, the Microsoft division formed in January 2025 to build its AI platform and tools. LinkedIn still runs as a separate business inside Productivity and Business Processes.

Microsoft also cuts and sells. After Activision Blizzard joined, it announced 1,900 job cuts in gaming in January 2024 and the closure of four studios in May 2024, including two that came with ZeniMax; one of them was later sold to Krafton. It retired the Xandr name in 2023, announced in 2025 that it would shut Xandr’s ad-buying platform in early 2026, and sold Metaswitch, bought in 2020, to Alianza in 2025.

For an owner, the time to settle your role, your team’s packages and the commitments that matter to your customers is before you sign. After closing, Microsoft decides the roadmap.

Microsoft’s Competitive Position

Microsoft ranks first among the large product companies in our ranking of software acquirers, ahead of Alphabet und Cisco. The counts also show the turn: Microsoft made three software acquisitions in 2023 to 2025, against 17 each for IBM and Cisco and 14 for Salesforce.

In our view the turn has three causes in the public record: capital directed to cloud and AI infrastructure and to the OpenAI partnership, regulatory scrutiny that made the Activision Blizzard deal a 21-month process, and an AI strategy that Microsoft can pursue by building, licensing and hiring. The buyers that compete with Microsoft for software companies are the other large platforms, among them Alphabet, Salesforce, ServiceNow, Cisco and IBM, and private equity platforms building positions in your market.

Is This a Good Time to Sell to Microsoft?

Microsoft is buying again, slowly. After zero acquisitions in 2024 and two in 2025, it bought Osmos and Fintool in the first four months of 2026, both small AI and data tools that went straight into Microsoft Fabric and the Office group. Those deals show where Microsoft’s appetite sits today: tools for Copilot and Fabric, with teams that join the product group.

The wider software market repriced in early 2026, as AI coding agents cast doubt on parts of a sector that we saw as already carrying excessive valuations. In our March 2026 webinar on SaaS valuations we noted that the businesses holding up best were smaller, vertically focused and serving mission-critical workflows, and that more buyers now ask how a business is addressing AI disruption risk. A buyer like Microsoft can ask a sharper version of that question: whether it could build your product with its own AI tools.

The case for selling to Microsoft is strongest for a company whose product fills a specific gap in Azure, Microsoft 365, Fabric, security or GitHub, with a team Microsoft wants to keep. For a company with a growing customer base and its own path to profit, the stronger price may come from a buyer that values the business itself, and keeping the company is a good option too.

Why You Need an M&A Advisor When Microsoft Approaches You

The buyer has made 86 software acquisitions since 2015 and knows what it would cost to build your product itself; the owner across the table is selling one company. Microsoft can price you against building or licensing the same capability, as the Inflection arrangement showed.

Establish what the business is worth on its own before the first offer arrives, from comparable transactions and from your own numbers. Then work out what it is worth to Microsoft, which depends on the product line it would join and on how long Microsoft would need to build the equivalent. That second number is the one to negotiate toward.

Bring in other buyers. A strategic acquirer in your market, another large platform, or a private equity buyer can pay for the business as a business, and a second bid tests the first. Microsoft’s own speed works for you here: a buyer that signs and closes on the same day for most small deals can move quickly when it has competition.

Negotiate the package as hard as the price: cash at closing, the retention equity and its vesting, your role, and what happens to your product and customers. The figures on this page describe a market; your company will be priced in a negotiation.

That is the work we do for owners of software businesses while they keep running the company. For how an approach fits into a wider sale, see Software-Unternehmen verkaufen und strategische versus finanzielle Käufer.

Über Aventis Advisors

Aventis Advisors is an M&A advisor for software and technology companies. We believe the world would be better off with fewer but better quality M&A deals, done at the right moment for the company and its owners. Our goal is to provide honest, insight-driven advice that lays out all the options clearly, including the option to keep the status quo.

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