Microsoft's operating chief Kevin Turner on Thursday set out to position the software giant as a cloud computing leader with a broad portfolio that rivals such as Google, Salesforce.com, Amazon and VMware can't match.
Turner, speaking at Microsoft's financial analyst meeting, spent a lot of time talking about the company's Azure strategy. He dinged rivals and touted a broad portfolio of cloud services ranging from the Azure appliance to SharePoint, Office, CRM and other products in the cloud.
The overall message from Turner, as well as research chief Craig Mundie, was to establish Microsoft's cloud credibility. The company has landed a bevy of big customers for its Azure services, but is largely characterized as a company milking its Windows and Office franchises.
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To address that perception, the first part of Microsoft's executives talks revolved around cloud computing. Microsoft execs cited many of the lines used by all cloud providers---pay for what you use; Capex to opex, agility, no patching etc.---but ultimately pushed breadth as the key differentiator in the market.
Turner said that a few years ago, Microsoft was viewed as "responding and reacting" to the cloud. "We were quietly but diligently working on making sure that we contemporize all of these products and solutions to enable them for the cloud," said Turner. "2010 was our year to bring it to the market. We didn't go out and oversell our position in this particular space."
In fact, we actually held those cards a little close, because we wanted to make sure when we went out and talked about our cloud services story, it was what we were going to do today. Not three years from now. Not five years from now. Today. And that was a very, very strategic decision for us. And a very good one. So as I said to you, we are the clear market leader as it relates to cloud services for business customers.
Turner's talk, which sounded very similar to the stump speech he gave to partners, was designed to get Wall Street to value Microsoft's cloud efforts. Turner even knocked VMware's "overbloated" market cap. The not-so-veiled aim for Microsoft is to get Wall Street credit for its cloud efforts and some of the love that Google and Amazon gets.
Most of the market cap envy, however, revolved around VMware, which is increasingly seen as a big Microsoft foe. Turner said:
When you think about the competitive landscape, the industry really talks about it in three ways. They talk about it as software as a service, platform as a service and infrastructure as a service. When we think about how that software gets used and provisioned it's really around global providers, service providers and partners and the customer, private clouds. When you think where we're at, when you think about let's talking about Google and sales force for a second. They certainly target software as a service and they dabble some in as platform as a service. But their capabilities are far short of what we're doing from an Azure perspective. When you think about Amazon. Amazon clearly is an infrastructure as a service. But it only provides a limited set of platform as a service capability and virtual machines you manage with Amazon that you maintain and update. Not a whole broad platform as a service, and there's no partner and no host or story with Amazon. When you think about VMware. VMware really is a virtualization provider. Their definition of cloud is they virtualize cloud. And the platform services that they talk about are very disconnected from the underlying infrastructure.
In fact, one of the big advantages that we have of versus VMware they don't run their own data centers. They're not getting the knowledge associated with what it takes to run a world-class global service that we get with Windows Azure and we can then transfer those learnings to the service provider, our partners and directly on to our customers. That's the strategic opportunity we have.
So when you look at where Microsoft is playing across that breadth of offerings, the depth of what we're providing, clearly the sweet spot we have for this company in the most profitable area of this company is right in the heart of providing this IT as a service for our customers.
This slide---where Microsoft is showing its cloud platform covering the specialties of Amazon, Salesforce.com, Google and VMware---illustrates the software giant's thinking.
Turner then cited a bevy of customer wins from Federal Express, McDonald's Coke, Dow Chemical, Hyatt and others. Turner also couldn't resist a dig or two at Google Apps and highlighted a few accounts where Microsoft won deals back from companies that went Google.
Add it up and Microsoft has a nice story to tell and the company is in many cloud bake-offs with Amazon Web Services and Rackspace. What remains to be seen is whether Microsoft can ultimately pivot its business model to revolve around cloud computing. That tale will play out over the next decade and customers will ultimately decide.
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