Home  //  Tags

Behind Microsoft's cloud numbers Home Subscribe Email Print

Microsoft's cloud business is expecting to be a $4.5 billion business.  But a Business Insider article suggests this $4.5 billion number isn't as straightforward as it would seem.

One source says "What Microsoft is doing is claiming a certain percentage of their Enterprise Agreements — these are renewals of their big licensing agreements — as cloud revenue. They bundle the rights to use Azure or Office 365 as part of their overall agreement. The  secret is that very few customers are actually taking Microsoft up on using Azure in any meaningful way."

So, when an enterprise signs a new contract to buy software such as Windows, SQL and Microsoft Office, the salesperson may include for free (or almost free) access to Microsoft's cloud Azure (including a cloud version of the database) and Microsoft's Office 365.

Don't forget that Microsoft had gross margins in the 90% range for Office and Windows. There is no way to sustain that type of monopoly pricing in cloud when competing against Amazon and Google, a source says.

 

Contact Re-Soft today to get help!

helpdeskimage

To order products or request more information, click here or email This email address is being protected from spambots. You need JavaScript enabled to view it. detailing your requirements or call us at (203) 972-8462 to discuss your needs.
Scroll Up