How Microsoft reinvented itself for the cloud era

Dive Brief:

  • Microsoft stock hit a record high last week, bolstered in part by the success of its Azure cloud platform. But the company has come a long way. When other areas of its business-software empire started drying up around 2006, Microsoft bet big on cloud, The Seattle Times reports. 

  • After a rough start, the company course-corrected. Last year, sales of the Microsoft’s web-based computing infrastructure brought in about $2.3 billion, analysts with RBC Capital Markets recently estimated.

  • It’s evolve or perish in the tech world, and Microsoft saw it coming. Once on a downward trajectory as the tech industry shifted, Microsoft invested in a cloud future, spending billions on new data centers, rewriting software for delivery via the web and building and then rebuilding its Azure cloud platform.

Dive Insight:

Microsoft is now considered the second biggest cloud computing company after Amazon Web Services.

After ten years, those investments are now starting to pay off. Microsoft recently boasted strong Q4 growth, with revenue from Azure growing 102% year over year. 

And while revenue from its cloud efforts are still just a small part of Microsoft’s total revenue, the company made the shift to the new line of business at the right time, setting itself up as a key player in a market ready to explode. Cloud computing is now one of the fastest growing areas of IT globally. A study released by HyTrust in May found nearly 75% of organizations plan to move additional systems to the public cloud this year.

Filed Under: IT Strategy Cloud Computing