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In a recent Forbes article, former VP of Strategic Communications at SAP, former Chief Communications Officer at Oracle, and current founder and president of Evans Strategic Communications LLC, Bob Evans, weighed in on the cloud wars between Amazon and Microsoft.
Evans broke down the 10 key elements of Microsoft’s progress and strategy in the words of Microsoft CEO Satya Nadella and CFO Amy Hood taken from their comments during Microsoft’s July 19 earnings call for its fiscal 2018 Q4.
According to Evans: Why Can’t Amazon Match Microsoft In The Cloud?
Azure’s Ability to Scale Correctly on Demand is Added to its Plate
According to CFO Amy Hood, Microsoft doubled the number of $10-million-plus Azure agreements and closed a larger-than-expected amount of multimillion-dollar commercial cloud agreements.
Beating the company’s expectations, Hood also reported that commercial unearned revenue was $29 billion, up 23%.
Fiscal fourth-quarter commercial-cloud revenue rose 53% to $6.9 billion and Azure revenue grew 89%.
Azure’s Potential to Be the Go-to Computer
Microsoft CEO, Nadella reports that his prediction of Microsoft’s ability to interweave the cloud and the edge is allowing Microsoft to offer them, “ideal platform for customers’ digital transformations.”
In an effort to force Amazon, IBM, and others to catch-up with Microsoft’s advancements, Nadella said they are, “the only hyper-scale cloud that extends to the edge across identity, data, application platform, security, and management.” He added, “We are investing aggressively to build Azure as the world’s computer.”
Azure’s Capacity to Handle Mission-Critical Workloads
Nadella reported a continued growth of Microsoft handling Tier 1 workloads for many companies.
Citing Microsoft’s IaaS growth, Nadella believes they are going to continue to see businesses using both Azure and Azure stack as they move their workloads to the cloud. He believes businesses will concurrently discover that this is the perfect time to transform their legacy apps and move toward more advanced technology.
Microsoft’s Friendly Path to the Cloud
Hood touted Microsoft’s commitment of continuing to focus on creating customer value as a reason why they are still seeing a growth in their on-premises server business.
Hood said they persist at making the Microsoft platform a friendly way that their customers can move from on-premise to the cloud.
Microsoft’s Friendly Path to the Cloud Through Microsoft 365
Microsoft 365 gives business customers the freedom to take their existing familiarity with Microsoft Office and begin moving into higher-level cloud services.
Since Microsoft 365 is a multibillion-dollar business, it has the reach to give their customers a path to the cloud that otherwise might cause them to be apprehensive about approaching it.
Microsoft’s Competitive Advantage
Microsoft states that their vision for both centralized cloud computing and edge computing is to keep them together as much as possible. They don’t want to have two separate camps; one for edge computing and another for cloud computing.
Nadella said: “…our real competitive advantage and differentiation is, we have one programming model, one identity model, security, management, etc, so those modern developers, as well as IT, can use the computer available from Azure Sphere to Azure.”
Microsoft’s Best-Kept Secret
Azure Hybrid Benefit, a licensing model which gives businesses the ability to transfer money already committed to on-premises versions of Windows Server Standard and Datacenter Editions to the Azure cloud is what Nadella calls Microsoft’s “best keep secret.”
Nadella said Microsoft has not been good at promoting the Azure Hybrid Benefit, and he anticipates substantial progress to take place with this program in the future.
Microsoft’s Dynamics 365 Aggressive Position
Microsoft’s suite of Dynamics 365 SaaS applications has a price advantage and the value advantage for customers in what Microsoft considers to be a profoundly patchy market.
Microsoft envisions fully exploiting its place as an enterprise-cloud provider for both large and midsized businesses that can lead its customers through the digital-transformation journey.
Microsoft’s S&P Leverage
Microsoft admits that cloud revenue is growing more than CapEx is growing, but CFO Amy Hood said she believes that the rate of CapEx growth will moderate. According to Hood, they are adding regions and seeing a lot of global demand and improving margins.
As Microsoft’s margins increase, their ability to continue investing many billions of dollars across their extensive range of enterprise-cloud services will expand as well.
Microsoft’s LinkedIn Acquisition
Microsoft’s surprising $26-billion acquisition of LinkedIn has been remarkably successful. With a revenue growth of 37% in the last quarter, that is their “fifth consecutive quarter of revenue acceleration,” said Nadella.
Improving LinkedIn’s quality of video feed, messaging, and growth in mobile usage, made LinkedIn the go-to platform to connect business professionals worldwide.
Although Microsoft is not unbeatable, their ability to provide just one source that gives IT cloud providers the capability of designing the best-imagined cloud experience for their customers gives them a leg-up on Amazon and all other competition. The fact that businesses can use the full suite of well-known Microsoft products in the cloud and combine their own cloud products and services under only one billing arrangement gives them the decisive advantage.