Microsoft is a huge multinational technology company, with lines of business spread across PCs, productivity software, gaming, internet search, and more. But after its third fiscal quarter earnings report came out yesterday, financial analysts spent most of their time asking about a very specific business.
Questions about Microsoft Azure and associated cloud services dominated Microsoft’s financial results call yesterday afternoon. By contrast, market leader Amazon Web Services only came up a handful of times during the Amazon call with analysts, which makes some sense given that AWS is already a well-understood component of Amazon’s overall business.
For Microsoft watchers, this shift is a little newer. The company still doesn’t break out revenue for Azure (come on, folks, it’s about time) but said Azure revenue nearly doubled compared to last year, and CEO Satya Nadella was peppered with questions about Azure and cloud growth in general.
Here’s a few of his answers, courtesy of a transcript from Seeking Alpha:
— On the evolution of the cloud: “For example, right when everyone’s talking about the cloud, the most interesting part is the edge of the cloud. Whether it’s IoT, whether it’s the auto industry, whether it’s what’s happening in retail, essentially compute is going where the data gets generated, and increasingly data is getting generated at the volumes in which it’s drawing compute to it, which is the edge.”
— On cloud holdouts: “But we do have a huge on-premise base. There is still a need for those on-premise products. That will continue, but our focus is on transitioning to the cloud.”
— On short-term thinking: “These are generational opportunities that what’s at play when it comes to the Intelligent Cloud or what’s happening in augmented reality. Either one of those things, I think if we started viewing it quarter to quarter or year to year, we’ll completely miss the trend.
But I completely understand that all of you measure us to what we have done for you lately. And that’s a fine way and we’ll keep account of it, but that’s not how it works.”
— On enterprises moving to the cloud: “…it’s not about in fact taking any old workload per se, but it’s about reimagining what they want to do across these. And in that context, of course, they’re lifting and shifting some of the older workloads, but they’re modernizing the entire business process flow. And that’s what’s I think (is) the killer opportunity, not any one technology, but the entire flow.”