Microsoft (MSFT) at Deutsche Bank Notes

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Microsoft’s Azure is in a two-horse race with Amazon’s AWS

“I’d like to joke, each of these little blue dots you can kind of see from space and in many cases they are now massive, massive facilities. This is one in our east U.S. region, you can sort of see the scale that little thing in the bottom right is a very large truck. This is another angle of the build out that’s happening, this is ultimately, this facility is now I think actually built out, it’s about two miles long and this one location will ultimately host about a million servers. And this kind of scale at that global level is something we fundamentally believe, really very few companies in the world are going to be able to provide, and for the most part we see ourselves through the two-horse race today with AWS as that provider” Scott Guthrie – EVP, Cloud and Enterprise

 

Three requirements to become a cloud vendor–vast amounts of CapEx, thousands of engineers, and a lot of time–create a big barrier to entry

“I think to be a hyper skilled cloud vendor which I think increasingly is going to be the thing that any enterprise is going to want to adapt, I think you ultimately would have three things which create kind of a motive you will around the market. And one is, you need to be able to spend vast amounts of money in terms of CapEx, so billions and billions of dollars a year, building out data centers, buying private fiber, building servers; I mean that immediately creates a pretty big barrier to the market.

Secondly, you have is thousands of engineers that can write — distribute systems code; you can’t just buy into this market because none of the servers that we use now are off the shelf servers… And then the third thing you need to have is frankly time; a lot of these things that you learn in the cloud in terms of operating at the scale, there is no book you can go to Barnes & Noble, how do I manage million servers, it’s all pretty new, right… And so the combination of those three things creates a pretty big mode, and when I look at other vendors in the market, I think that’s going to be very difficult for folks to break in.” Scott Guthrie – EVP, Cloud and Enterprise

 

Azure has more than 120,000 new subscriptions every month

“Collectively, all these customers are driving huge amounts of adoption. We’ve got more than 120,000 new customer subscriptions being created every month, about 1.6 million production databases are now being hosted in Azure alone, more than 2 trillion IoT messages each week, more than 5 million organizations that have sung through identity server and integrated their user employee security as part of our cloud, 4 million developers, and the thing we always like to emphasize is as much as we are focused on enterprise, having a cloud is great for enterprises, also makes a lot easier for software vendors to build their solutions, hosted on our cloud and reach those enterprises as well, about 40% of our overall revenue for example with Azure comes from startups and software vendors building solutions on top of us.” Scott Guthrie – EVP, Cloud and Enterprise

 

Cyber threats are significantly greater today than they were a decade ago

“Well, I think in general the threat environment that we all live in now is significantly scarier than it was a decade ago versus two decades ago. And I think the adversaries out there are getting more sophisticated, the types of attacks that are happening are happening more frequently, and that’s just going to be the new normal for us going forward. And the important thing when you think about security is you’ve got to be paranoid and you can’t take anything for granted, and your any vendor who says, use my stuff and you will be perfectly secure, run away from because they — don’t get security or they are lying.” Scott Guthrie – EVP, Cloud and Enterprise