Welcome to the Cloud Wars Minute — your daily cloud news and commentary show. Each episode provides insights and perspectives around the “reimagination machine” that is the cloud.
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In today’s Cloud Wars Minute, I take a look at what I’m calling Microsoft’s generative artificial intelligence (GenAI) dividend.
Highlights
00:56 — Microsoft’s “GenAI dividend” means that even as the size of the business grows, it thinks that the new contributions in revenue coming in from AI are going to allow its Azure growth rate to hold steady at around 26% or 27% for the next few quarters. By my estimates, it’s somewhere between $15 billion to $17 billion per quarter.
01:48 — Microsoft will release its numbers at the end of January. Amy Hood, CFO, expects these trends of 26%, 27% Azure growth fueled by AI will continue at least through the middle of next year. Now, Hood qualified that slightly by saying this is assuming that the trends it’s seeing in both optimization and new workloads continue.
03:04 — Hood was referring to the tendency for the last several quarters among a lot of businesses to say, “We’re unsure about where this economy is headed, we want to slow down our IT spending.” That dragged down the growth rate of a lot of the Cloud Wars Top 10. I think that’s changing. You have to build for the future.
04:25 — If it was important to do that earlier to gain all the benefits of the cloud, it’s even more so now with AI. Companies just cannot use these new incredible AI capabilities on-premise. If they want the AI, they’ve got to get into the cloud.
04:44 — Now, my final point is that doing nothing is deadly. Business leaders out there who say, “I just want to wait this out, see if it’s real or not,” are going to have less competitive capability.
