Microsoft's focus on large customers promotes cloud sales

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Microsoft
Corp.

The bet on the delivery of business software on the Internet is bearing fruit, thanks to the technology giant's ability to understand the needs of its corporate customers and help them adapt to a rapidly evolving market.

The company's fourth-quarter record revenues, announced last week, were boosted by the cloud computing business, where sales increased 39% from the previous year. The revenue of the Azure cloud service alone has increased by 64%, the company said.

Success is based on its technology, combined with an understanding of the software needs of complex companies. The company over the decades has developed the ability to understand large companies. This allowed Microsoft to develop a range of technologies that allow customers to consolidate their purchases with a family source. At the same time, it has remained technologically competitive.

"Microsoft is not just a cloud company," said Sue Bergamo, Chief Information Officer at the digital marketing and marketing company Episerver, a Microsoft customer. "I am a partner who works with clients to understand business problems," he said.

"One of Microsoft's main advantages in the cloud market is the appreciation of the unique technological needs of large organizations," said Tim Crawford, founder and Chief Information Officer of AVOA LLC, a strategic consulting firm.

"One of the things about the business that few people understand is the complexity of corporate IT," he added, adding that Microsoft talks to CIOs and other corporate IT managers "in a language they can understand."

Redmond, Wash., The attention of the company towards large corporate customers is helping to keep up with the cloud market leader.

Amazon.com
Inc.

Amazon Web Services cloud drive. Amazon holds about a third of the global cloud market, with Microsoft ranked second at 16%, far ahead of the rest of the package, according to research firm Canalys.

Despite Azure's rapid growth, its market position with respect to AWS has changed little in recent years, as gains from the cloud market accumulate in the two competitors.

Steve Stine, senior vice president of business transformation at

AT & T
co

As far as communications are concerned, Microsoft's understanding of the IT needs of corporate customers was one of the main reasons for a move announced last week to move most of the internal business applications into the communication unit of AT&T Inc. to Azure, Microsoft's leading cloud platform.

"We will work with Microsoft because they have experience in doing this and helping large companies," Stine told the CIO Journal.

Agreements with AT&T and other large organizations are pushing sales into Microsoft's cloud drive and increasing overall revenue.

A Microsoft spokesperson credited the company's cloud success to be able to meet customer needs.

The company's earnings are expected to grow as more companies increase spending on cloud services, which provide software on demand, processing power and storage.

Global spending in the public cloud, in which companies pay technology and storage technology companies, is expected to double in the next five years to around $ 500 billion in 2023 from $ 229 billion this year, according to International Data Corp. More than half of total spending will come from companies with 1,000 or more employees, IDC said.

Amazon AWS counts Dole Food Co.,

Hess
Corp.

,

McDonald
Corp.

and other large companies as customers. It has also proved popular with start-ups, small businesses and companies that shape their technology infrastructure on consumer Internet companies, many of which seek individual software tools to develop unique services, rather than fully-formed platforms, said Crawford of AVOA.

Amazon declined to comment.

For Microsoft, it helps the company keep up with corporate customers for a long time through its suite of business applications, which many companies have traditionally run on internal servers and data centers, facilitating the transition to the cloud.

Taking cues from CIOs and other corporate IT managers, Microsoft has invested heavily in capabilities like artificial intelligence, at a time when more companies are experimenting with advanced digital tools, said Dave Bartoletti, vice president and principal analyst at Forrester Research .

"Clouds are the best place to experiment," Bartoletti said.

Microsoft announced this week its intention to invest $ 1 billion in OpenAI LP artificial intelligence startups, a move to develop supercomputing technologies for Azure, the company said.

"One of the things that Microsoft is really good at is that it can deliver solutions to the limits and to the cloud and all that," said Crawford of AVOA. "No other company can really do it at the software level," he said.

Write to Angus Loten at angus.loten@wsj.com

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