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April 30, 2015

Nadella sets $20bn cloud target for Microsoft

Company planning to add Enterprise Mobility Suite to its commercial cloud business.

By CBR Staff Writer

At its annual Financial Analyst Meeting, Microsoft CEO Satya Nadella has set his cloud revenue target sky high and eyes to earn $20bn in annual revenue from its cloud-computing businesses, which is more than three times its present cloud revenue.

Microsoft reported $6.3bn in revenue from its commercial cloud business during its third quarter fiscal 2015 earnings. The company has managed to earn more than double the revenue in each of the past seven quarters.

Presently, its commercial cloud business includes Amazon Web-services’ rival Azure, Office 365 business services and CRM Online service. The company is planning to add its Enterprise Mobility Suite to the line-up to bump up its revenue.

Nadella said, "So that’s our target, and that’s what we’re going to pursue with the strategy I just laid out.

"And this, by the way, is about really the combination of what we today have in Office 365, Dynamics, EMS, Azure.

Microsoft has made a name for itself in the software business and by providing storage and computing power to customers via its vast array of network of data centres it has managed to become one of the leaders in cloud services.

Microsoft CFO Amy Hood said Financial Analyst Briefing: "We’re really focused on three key areas as we transform: The device platform and devices, digital work and life, and our cloud platform.

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"By the end of this year, we do expect approximately 35 percent of our install base will be cloud units in Exchange.

"We think about our commercial cloud as having all the components. It’s IaaS, it’s PaaS, and it’s SaaS. It makes us different."

"And on capital expenditures I do expect ongoing investment to support this cloud growth.

The Financial Analyst Meeting also saw executives going through the changes that are anticipated in Microsoft’s transactional and business models, which included the introduction of Windows as a Service backed by Azure.

According to reports, Windows as a Service will not charge users to get new fixes and features which is contrary to what the company is presently engaged in with Office 365, where users have to pay monthly/annual subscription.

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