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 reflect on the extraordinary journey of Microsoft CEO Satya Nadella.
Highlights
00:19 — There’s probably no executive in the tech industry, perhaps the entire business world, who has set out so deliberately and successfully to create a very different future for his company and that would be Satya Nadella of Microsoft.
01:05 — Ten years ago, Nadella emphasized the need for Microsoft to move into a new phase of being a mobile-first and cloud-first company. Swinging to the present, cloud now represents 54% of Microsoft’s $62 billion in quarterly revenue for the quarter ended December 31. Now, the market cap, which when he started was $256.1 billion, is over $3 trillion.
02:22 — So, in 10 years, a market cap lift of 11.8X, which is astonishing. Its fiscal Q2 Cloud revenue is $33.7 billion. So now it’s more than half of Microsoft’s total revenue. The growth rate last quarter was 24%, and 24% is a very big, impressive number. The next biggest Cloud Wars company, AWS, is 40% smaller than Microsoft.
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03:11 — Outside of the technology, the partnerships that Nadella has driven with almost all of the Cloud Wars Top 10 companies are remarkable. It’s built up a massive artificial intelligence (AI) business already; it has 53,000 customers using Microsoft AI products and solutions.
03:33 — In the spirit of the partnerships, I want to say a couple of things about the “Satya and Larry Show.” Now Microsoft customers can access, buy, use, and manage the Oracle Database through Microsoft Azure. Nadella cited the big growth in Azure three months ago as being the result of what he called the “unlock” of demand among Microsoft customers for the Oracle Database.
04:31 — This shows what can happen when leaders like Nadella and Larry Ellison get together and decide they’re going to change the nature of the game, do what’s best for customers, and put their companies on entirely new growth trajectories.
04:52 — Nadella took a struggling company, which had lost its way, and said, “We are going to go and do this cloud thing full force, unconditionally.” After 10 years, it has been one of the greatest success stories in the history of American business. Really a spectacular achievement and a lesson for lots of us on focus, vision, and commitment.
