Satya Nadella screwed up the cloud business and Microsoft named him CEO

[Spectrum90]

Microsoft named Satya Nadella president of the Server and Tools business in 2011, with the mission of developing the cloud business.

According to an article in Forbes, Nadella's results were awful. Amazon AWS is 10 times bigger than Microsoft Azure. Microsoft is competing with IBM and Google for the leftovers.

Regardless of this disaster he was named CEO.

 

[Angry_Mushroom]

I'm not sure how this is a disaster. Forbes doesn't even imply that Azure was a failure or disaster of any variety. In fact the report you linked goes on to point out that the market still has huge potential, and Azure is growing week by week. Considering this man likely built the service from nothing indicates a pretty great success story as far as I'm concerned. His flexibility and forward thinking is what's driven him to become the CEO. Not sure why people dislike him so much right now.

 

[Spectrum90]

I'm not sure how this is a disaster.

The article says that Amazon is expected to maintain its overwhelming lead.
Microsoft Azure was destroyed by Amazon while Nadella was on charge of that division and compromised one of the key businesses for the future Microsoft. That's a disaster.

As Nadella says: "this is a cloud first, mobile first world".

 

[Jas00555]

From the article: "Microsoft's annual revenue for Azure is estimated to be between $500 million and $700 million."

By who???? Who has ever said this? A Bing search for "Azure Revenue 2014" shows that Microsoft reported that Azure has an annual revenue of over $4.4 billion

(I can't link the article because Windows 10 won't let me paste in WC app, but search that and look up the one from news.microsoft.com)

Another search will tell you that Azure is growing >100% every year while AWS only grows around 30%.

 

[Spectrum90]

A Bing search for "Azure Revenue 2014" shows that Microsoft reported that Azure has an annual revenue of over $4.4 billion

(I can't link the article because Windows 10 won't let me paste in WC app, but search that and look up the one from news.microsoft.com)

Another search will tell you that Azure is growing >100% every year while AWS only grows around 30%.

Microsoft doesn't disclose Azure revenue because is too low. They add Azure to Office 365 which is huge and is growing fast, and call that "Commercial Cloud". This is done to inflate the numbers.
Azure is Infrastructure as a Service and Platform as a Service. Office 365 is Software as a Service, very different. To compare to Amazon AWS or other competitors the analyst has to isolate Azure revenue form Office 365.

 

[Jas00555]

*sigh* You're really gonna make me pull my computer out to post a link instead of going to the investor relation page I told you how to get to?

 

[Jas00555]

FY14 Q4 - Press Releases - Investor Relations - Microsoft

^^^Here's the link you were too lazy to go to...

And here's the part I was talking about that is copied verbatim from the link:
"“We are galvanized around our core as a productivity and platform company for the mobile-first and cloud-first world, and we are driving growth with disciplined decisions, bold innovation, and focused execution,” said Satya Nadella, chief executive officer of Microsoft. “I’m proud that our aggressive move to the cloud is paying off – our commercial cloud revenue doubled again this year to a $4.4 billion annual run rate.”"

Satisfied?

 

[dkediger]

Considering AWS had a 4 year head start on Azure and was the only name brand game in town for much of that, you would expect some disparity.

As long as revenues are growing and platform and services offerings are broadening, they're shouldn't be any concern. Considering the anti-Microsoft sentiment out there, to enter a segment dominated by a well known player and grow it, ummm, yeah, disaster of Titanic proportions </sarcasm>

 

[Spectrum90]

"?I?m proud that our aggressive move to the cloud is paying off ? our commercial cloud revenue doubled again this year to a $4.4 billion annual run rate.?"

Satisfied?

No. As I said, "Commercial cloud" includes Azure and Office 365, please read my last post.

As long as revenues are growing and platform and services offerings are broadening, they're shouldn't be any concern.

The article suggests there are economies of scale in the industry, that means costs are lower as production increase, that means Amazon has lower costs than Microsoft.
That's reflected in reality, you would expect that the challenger would offer lower prices to grow faster, but It's not the case, Azure only matches Amazon's prices whenever the last one slashes theirs. That makes really difficult to change the situation.

I don't think the problem was that Amazon started first. The problem was that Nadella bet in PaaS over IaaS, and that was a big mistake, the biggest part of AWS revenue is IaaS. I think the GA of IaaS was in mid 2013, too late.
He also realized too late that Microsoft loves Linux.

 

[Angry_Mushroom]

I'd hardly say it's a disaster. MS has been quick to adapt in this business, and frankly it's blown me away on how fast they've managed to react to the changing landscape. Amazon might be ahead, but that doesn't mean Microsoft has been defeated here. The field is set to double in the next few years, and both companies are investing very heavily into the cloud. It's anyone's game from my point of view.

Once again... I'm not sure where you are going with your hyperbolic statements. Microsoft is doing fine, and growing. I'd just as much blame Ballmer for this since he was the CEO in 2011.

 

[Jas00555]

No. As I said, "Commercial cloud" includes Azure and Office 365, please read my last post.




The article suggests there are economies of scale in the industry, that means costs are lower as the production increase, that means Amazon has lower costs than Microsoft.
That's reflected in reality, you would expect that the challenger would offer lower prices to grow faster, but It's not the case, Azure only matches Amazon's prices whenever the last one slashes theirs. That makes really difficult to change the situation.

I don't think the problem was that Amazon started first. The problem was that Nadella bet in PaaS over SaaS, and that was a big mistake, the biggest part of AWS revenue is SaaS. I think the GA of SaaS was in mid 2013, too late.
He also realized too late that Microsoft loves Linux.

Ok, even if it includes O365, that's only ~$750 million per year. Microsoft has confirmed that there are about 9 million O365 subscriptions. We don't know the division between home and personal, but lets split in the middle and say $85 (and that's very generous of the ASP considering they've been giving away Personal with a bunch of PCs). 85 x 9 million is $765 million. Where is the rest of that money coming from?

 

[Mike Waechter]

Mate, its not home and personal that's driving the revenue. Its government, healthcare and large enterprise business that moved to O365. My former position required me to know everything about it and that is the revenue driver now. Only recently has MS shifted major resources to the cloud.

 

[Mike Waechter]

Oh, its Amazon, Google/Microsoft, Rackspace, and CenturyLink coming in last.

 

[Spectrum90]

Ok, even if it includes O365, that's only ~$750 million per year. Microsoft has confirmed that there are about 9 million O365 subscriptions. We don't know the division between home and personal, but lets split in the middle and say $85 (and that's very generous of the ASP considering they've been giving away Personal with a bunch of PCs). 85 x 9 million is $765 million. Where is the rest of that money coming from?

Microsoft classifies revenue in tow big categories: Consumer and Commercial (enterprise). "Commercial cloud" includes Azure, Office 365 commercial and other smaller enterprise services like Dynamic.
The consumer part of Office 365 is in another segment.

 

[dkediger]

This is just one specific way to look at it, but I would just say, don't underestimate the long term value of Microsoft moving its mid to large enterprise users to O365. Attendant with that move is usually establishing an AD presence within the O365/Azure virtual realms. It becomes much less of a leap to then look at your other local on premise servers/services. Why continue to host services/virtualize onsite when one of the biggest technical hurdles has been taken care of - that of authentication/SSO.

The Microsoft enterprises out there are for the most part just now chewing through 2003/2008 upgrades to 2012, but are getting enabling services/support built in as part of the deal to seriously consider making the next step.

If nothing else, keeping former on-premise Exchange users in the fold with O365 is a huge win in and of itself. It also points the way, and makes everyone comfortable, to start distributing other formerly local services, such as SQL.

This view sets up the comparison between AWS/Azure as more of an apples/oranges one. They're both fruit, but have very different characteristics...

 

[stephen_az]

Microsoft named Satya Nadella president of the Server and Tools business in 2011, with the mission of developing the cloud business.

According to an article in Forbes, Nadella's results were awful. Amazon AWS is 10 times bigger than Microsoft Azure. Microsoft is competing with IBM and Google for the leftovers.

Regardless of this disaster he was named CEO.

A) Forbes has been attacking Microsoft for years. They can only manage backhanded compliments and/or negative spin even when talking about a Microsoft growth market.
B) Amazon has yet to generate an actual profit as a company so take any Amazon numbers with a serious "forward thinking" grain of salt.
C) I don't like Nadella but he got his job because he took a Microsoft sideline business and turned into a core business with long term growth. It is called vision.
D) Much like all of Microsoft's other long term investments, the goal is not to beat anyone's revenue tomorrow nor to even match them. It is only ill informed sideline spectators (and the pseudo-journalists looking for page clicks) who think in such narrow terms. BTW, if you listen to the Forbes (and related) crowd, the Surface line was never going anywhere due to the initial failure.
E) Business is neither a sporting event nor is it a war. If you want to talk about disasters, failures, or even successes, get the facts and get some actual business experience. Otherwise you are just embarrassing yourself in front of a large audience. For those out there with the inevitable "I have a Business Degree from XXXXXXXXXX University," that is just a degree - experience requires you actually do things.

 

[TechFreak1]

I'm not sure how this is a disaster. Forbes doesn't even imply that Azure was a failure or disaster of any variety. In fact the report you linked goes on to point out that the market still has huge potential, and Azure is growing week by week. Considering this man likely built the service from nothing indicates a pretty great success story as far as I'm concerned. His flexibility and forward thinking is what's driven him to become the CEO. Not sure why people dislike him so much right now.

They probably dislike him for other reasons, such reasons which I will not elaborate as it is beyond the scope of this thread and forum. Not to mention it is a unnecessary discussion.

It is far to early to tell or rather "judge" if the appointment of Satya was the right thing or not as it has been barely over a year since he became CEO.

Honestly I would say they would be more apt 10 to 20 years down the line, right now these discussions / threads calling him a failure etc are just borderline immature & ********.

 

[TechAbstract]

Feature for feature. Auze is on par or better than AWS. They haven't screwed up anything.
Azure and AWS: Side-by-Side Feature & Services Comparison

 

[Revi Bennett]

Ah, the nine million is for home and personal and has nothing to do with office365 business that has about 50 million subscibers at about $24 per quarter = $1.2 billion per quarter. And the run rate is about $5 billion now. And azure iass and paas run rate is about 1.2billion. All that is cloud revenue. msft has 10% of iass, amazon has 30%, but msft is far ahead of anyone else. However, when all msft cloud is taken into account, it is the biggest cloud company by revenue. Bigger that amazon and saleforce and growing faster than them.

So stop being silly, msft leaves cloud. Infact google only makes about 1 billion in clod per year and it has been that way for about three years.

 

[Spectrum90]

Ah, the nine million is for home and personal and has nothing to do with office365 business that has about 50 million subscibers at about $24 per quarter = $1.2 billion per quarter. And the run rate is about $5 billion now. And azure iass and paas run rate is about 1.2billion. All that is cloud revenue. msft has 10% of iass, amazon has 30%, but msft is far ahead of anyone else. However, when all msft cloud is taken into account, it is the biggest cloud company by revenue. Bigger that amazon and saleforce and growing faster than them.

So stop being silly, msft leaves cloud. Infact google only makes about 1 billion in clod per year and it has been that way for about three years.

Did those numbers come out from your fertile imagination?