For Microsoft boss Satya Nadella, the cloud business of the US software group is apparently the best way to save the company from the current crisis. The strong growth of the cloud division is apparently intended to compensate for weaknesses in Windows.
As Satya Nadella, who has been Microsoft’s CEO since 2014, explained in an interview with the Japanese business portal Nikkei Asia, he assumes that the company can continue to grow mainly thanks to the good performance of the cloud business. The conditions for this are good, as has recently been shown by the 30 percent growth in sales in the cloud division in a year-on-year comparison.
Unlike Amazon and Google, for example, the cloud market is not yet saturated for Microsoft. Needless to say, Nadella believes that its competitors have little room for further growth, while Microsoft itself still has plenty of potentials. There are few other vendors that could post such growth in current economic conditions with annual sales in excess of $100 billion, Nadella said.
Microsoft wants to bundle cloud and end-customer products
Meanwhile, the cloud business has become Microsoft’s most profitable line of business, accounting for a whopping 51 percent of the company’s total revenue. Still, the cloud division is in its early stages, Nadella says, so there’s still plenty of room for long-term revenue growth. Among other things, he relies on bundling with various other products of the company.
Instead of completing 15 different subscriptions, Microsoft customers could use more products as part of a joint subscription. According to Nadella, because the Redmond company offers better value than the competition in this way, one can continue to grow even during an economic crisis, according to the Microsoft CEO. While competitors are vulnerable to crises due to their dependence on the advertising market, Microsoft is more resilient thanks to its cloud business.
The cloud business, which is doing well, has recently absorbed the 15 percent decline in Windows sales. According to earlier reports, Windows itself should also play a role in the cloud strategy, as Microsoft is currently looking for ways to offer the operating system to a larger audience in the form of subscription models for its cloud services.
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