M+E Connections

Microsoft continues to see additional opportunities from the cloud and artificial intelligence (AI), according to Dave O’Hara, CFO of Cloud and Enterprise, Office, Dynamics, AI and Research at Microsoft.

The total addressable cloud market keeps getting bigger for Microsoft each year and “will continue to grow for the foreseeable future,” he predicted Feb. 25 at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco.

“Every year our total addressable market for the cloud gets bigger” as Microsoft keeps expanding its “footprint,” he said, adding: “We feel good about having a lot of runway in the cloud”

Microsoft Azure customers used to ask whether they really needed to move to the cloud, he noted. However, he said: “They’re well past that” now and “every customer needs a cloud strategy.”

The company’s customers are increasingly moving their workloads to the cloud and most started taking at least basic steps, including storage and compute, he pointed out.
“Now, they’re much deeper” than that, he said, adding customers are “much more interested in things like security,” as well as AI and the Internet of Things (IoT). “They’re just much more advanced” now, he said.

One big change is that, in the past, Microsoft was the one “encouraging folks to move to the cloud and now, in some ways, they’re pulling us” further into deep cloud strategies, he said, adding: “They have a lot of innovative ideas…. Some of the newer companies are coming in and disrupting some of the older players” and asking Microsoft to help them develop a cloud strategy to get “modern and current.”

The addressable cloud market is maybe not “limitless,” but “there’s a lot of runway” left and “I’m confident [it will] get bigger,” he predicted.

Microsoft customers are moving existing workloads to the cloud, he said, explaining: “A lot of the stuff that they’re doing on-prem now they can run more efficiently in the cloud and get more scale.” At the same time, “we also see a lot of innovation work” in the cloud by customers, he said.

Microsoft needs to present a “holistic story” for customers, who want a “roadmap” for their future in the cloud, he noted.

At the same time, there are still many devices on the market that can benefit from moving to the cloud, he told attendees, referring to them as potential cloud opportunities. In addition, “there are untapped opportunities out there that people haven’t even thought of yet” to monetize their initiatives, he said.

“There’s a few different ways you can monetize” AI, he also said. One way is to “build AI into all the existing apps that you have,” he noted, pointing out AI creates new additional value for those apps.

He was also asked why there’s been a positive change in perception among CIOs in the past couple of years or so, during which those executives have shifted more of their software dollars to Microsoft. He replied that CIOs today view Microsoft as “being more of a one-stop shop” for their many software needs. Many of the company’s customers don’t want “one-off solutions” and Microsoft is as close as they’ll get to avoiding those solutions, he said.