What We Can Take Away from Microsoft's Earnings Call
May 02, 2014
Microsoft’s (News - Alert) CEO has been flying under the radar since his tenure began, but recent events have given the public a few opportunities to get to know him and what is in store for the company looking into the near future.
Satya Nadella (News - Alert) did his first earnings call for the company’s fiscal third quarter. Key points made during the call put the cloud on the list of things to watch for; Microsoft has made mobile and cloud-computing initiatives part of its strategic direction, and insight into those business efforts will garner attention from investors and industry analysts.
According to Nadella, revenue from cloud-based Microsoft Office 365 productivity software more than doubled from commercial customers.
"This is gold rush time in being able to capitalize on the opportunity," Nadella said.
Nadella, who came on as CEO two months ago, is pushing for a focus on devices and software delivered over the Internet, both for Microsoft’s own Windows operating system and competitive programs. Web-based tools, such as Office software and Azure cloud services, are giving revenue a big boost, helping the company contend with declining PC sales and an inability to gain momentum in the tablets and phones market.
“Cloud continues to be a pillar of strength,” said Daniel Ives, an analyst at FBR Capital Markets & Co. “It’s not a great PC market at all, but it has become less bad.”
It’s becoming more evident that cloud computing is on the up and up. Software vendors are scurrying to re-architect their tools and re-evaluate the requirements of both their users, and the devices they use to access them. They are all working hard to do away with desktop tools we've become accustomed to, and deliver them in ways that will be more sustainable and functional for everyone.
Cloud computing is transforming a range of industries as more people see the benefit of services which don’t require them to install software or hardware.
The cloud has the potential to fundamentally change the way people think about and use automation and control, so as the physical counterparts are slowly declining in sales, companies like Microsoft are hopping on the cloud to see where it takes them. The numbers, if nothing else, are promising.
Many companies today are moving to cloud applications to help them respond to the rapid advances in today’s market environment while simultaneously ditching many of the high costs and hassles of maintaining complex internal systems. Microsoft sees that, and is harnessing it on both the commercial and consumer levels.
Edited by Rory J. Thompson
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