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Microsoft Says Its Future in the Cloud Is Bright

By Thor Olavsrud, CIO
October 09, 2013 12:21 PM ET

CIO - In case there was any doubt, Microsoft made it clear on Monday that it sees its future in the cloud. It unveiled a "wave" of enterprise cloud products and services--from Windows Server and System Center to Visual Studio, Windows Intune, SQL Server and Dynamics, to a new Windows Azure U.S. Government Cloud.

"The thing that I'm most excited about right now about our enterprise business is the new growth," Satya Nadella, executive vice president of Cloud and Enterprise at Microsoft, said at a press conference Monday evening. While Microsoft's enterprise infrastructure business is a more than respectable $19 billion business, "$2 trillion is at play as the world shifts to the cloud."

And while some industry-watchers have wondered whether Microsoft remains relevant in the post-PC era, Nadella says Microsoft is perfectly positioned to be lead the enterprise cloud era.

"As of late, there has been a lot of interest in what I call the commercial business, which spans nearly every area of enterprise IT and represents about 58 percent of Microsoft's total revenue," he said in a blog post. It's a critical business for us, with great momentum and one to which we are incredibly committed."

"But as people look to our commercial business in this age of cloud computing, big data and the consumerization of IT, people are asking questions about our future strength in the enterprise," he added. "Will Microsoft continue to be at the core of business computing in, say, 10 years? I'll be honest that there's a little dA(c)jA vu in that question; 10 years ago many people doubted our ability to be an enterprise company and today we surely are."

3 Keys to Delivering the Enterprise Cloud

Nadella says there are three keys to being relevant in the cloud:

SaaS applications drive infrastructure, he says, so you must have top-notch, first-party SaaS applications that run on your cloud. First-party apps are an important differentiator, he says, because running apps on your own cloud helps you understand the perspective of your customers.

Just as important, he notes, is running a breadth of different SaaS applications, which means you can't sugar-coat your cloud's performance by optimizing it for a particular application. He points to Microsoft's cloud-based applications, from Office 365, Dynamics CRM and Yammer to Outlook.com, Bing, Xbox Live and more than 200 other services.

"The widespread use of services like Office 365 provides a foundation for other critical cloud technologies that enterprises will adopt, such as identity and application management," he says.

You must operate a public cloud at massive, global scale, that supports a broad range of third-parties with fully supported platform and infrastructure services. Windows Azure, he notes, is available in 109 countries (including its recent debut in China) and supports eight languages and 19 currencies. It also has $15 billion in global data infrastructure investment supporting it.

You must deliver true hybrid cloud capabilities that provide multi-cloud mobility. "When it comes to providing public cloud-class infrastructure to others for building their own clouds, I would say we're leading [our competitors]," Nadella says, noting that Microsoft's infrastructure solutions--like Windows Server 2012 R2 and System Center 2012 R2--give customers the ability to build their own Azure-like clouds.

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