Link: Microsoft milestone: Tech giant’s cloud revenue now matches traditional products, analyst says

“We estimate that FY 4Q 19 was the first time MSFT generated as much revenue from running software in its own data centers, including cloud offerings like Azure and Office 365, as well as LinkedIn, Bing, GitHub and Xbox-Live, as it did from software licenses and upgrades, hardware and professional services,” according to the note from CFRA’s John Freeman.

Source: Microsoft milestone: Tech giant’s cloud revenue now matches traditional products, analyst says

Link: Configuring your release pipelines for safe deployments

“Also, it is recommended to not deploy to all production environments in one go, exposing all the customers to the changes. A gradual rollout that exposes the changes to customers over a period, thereby implicitly validating the changes in production with a smaller set of customers at a time… As an example, for an application is deployed in 12 regions with US regions (4) having a high load, European regions (4) having a medium load and Asian regions (4) having a relatively lighter load, following would be the order of rollout.”
Original source: Configuring your release pipelines for safe deployments

Link: Configuring your release pipelines for safe deployments

“Also, it is recommended to not deploy to all production environments in one go, exposing all the customers to the changes. A gradual rollout that exposes the changes to customers over a period, thereby implicitly validating the changes in production with a smaller set of customers at a time… As an example, for an application is deployed in 12 regions with US regions (4) having a high load, European regions (4) having a medium load and Asian regions (4) having a relatively lighter load, following would be the order of rollout.”
Original source: Configuring your release pipelines for safe deployments

Link: Walmart pick Microsoft Azure for cloud

“Walmart plans to deploy Microsoft’s machine-learning, artificial-intelligence and other services to help employees, for example, pick products that go on shelves and optimize the performance of freezers and other equipment. The retailer is aggressively cutting costs as it invests in growing sales online, and it is using tech to analyze its operations, an area of Amazon’s expertise.”
Original source: Walmart pick Microsoft Azure for cloud

Link: Walmart pick Microsoft Azure for cloud

“Walmart plans to deploy Microsoft’s machine-learning, artificial-intelligence and other services to help employees, for example, pick products that go on shelves and optimize the performance of freezers and other equipment. The retailer is aggressively cutting costs as it invests in growing sales online, and it is using tech to analyze its operations, an area of Amazon’s expertise.”
Original source: Walmart pick Microsoft Azure for cloud

Link: Walmart pick Microsoft Azure for cloud

“Walmart plans to deploy Microsoft’s machine-learning, artificial-intelligence and other services to help employees, for example, pick products that go on shelves and optimize the performance of freezers and other equipment. The retailer is aggressively cutting costs as it invests in growing sales online, and it is using tech to analyze its operations, an area of Amazon’s expertise.”
Original source: Walmart pick Microsoft Azure for cloud

Link: Walmart pick Microsoft Azure for cloud

“Walmart plans to deploy Microsoft’s machine-learning, artificial-intelligence and other services to help employees, for example, pick products that go on shelves and optimize the performance of freezers and other equipment. The retailer is aggressively cutting costs as it invests in growing sales online, and it is using tech to analyze its operations, an area of Amazon’s expertise.”
Original source: Walmart pick Microsoft Azure for cloud

Link: The Cost of Developers

That’s a lot of money.

“on the other side of the spectrum, purely enterprise-focused companies like IBM or Oracle would be tempted to wring every possible bit of profit out of the company…. What Microsoft wants is much fuzzier: it wants to be developers’ friend, in large part because it has no other option.”
Original source: The Cost of Developers

Link: The Cost of Developers

That’s a lot of money.

“on the other side of the spectrum, purely enterprise-focused companies like IBM or Oracle would be tempted to wring every possible bit of profit out of the company…. What Microsoft wants is much fuzzier: it wants to be developers’ friend, in large part because it has no other option.”
Original source: The Cost of Developers

Link: Microsoft has designed an Arm Linux IoT cloud chip. Repeat, an Arm Linux IoT cloud chip

An edge device in every home, office, street corner, etc.

“The way it works is like this: Microsoft makes its system-on-chip (SoC) blueprints available to chip designers, which fabricate the chipset and flog it to IoT device makers. These manufacturers slap the silicon in their products, and run Microsoft’s Linux-based Sphere OS along with their own software on the chip, which connects to Microsoft’s Azure Sphere running on Redmond’s cloud.

Sphere does things like make sure gizmos only run official firmware, and automatically pushes out and installs bug fixes on remote devices, and so on. In the process, the chipmaker moves more silicon, the device vendor gets a turnkey security service to show to customers, and Microsoft gets a cloud customer for the lifespan of the device.”
Original source: Microsoft has designed an Arm Linux IoT cloud chip. Repeat, an Arm Linux IoT cloud chip

Link: Windows chief leaving Microsoft as CEO Satya Nadella rolls out massive engineering reorg

‘The reorg includes the creation of two large new engineering groups inside Microsoft, focused on Experiences & Devices, led by Microsoft Office leader Rajesh Jha; and the company’s Cloud + AI Platform, led by Microsoft’s cloud and enterprise chief Scott Guthrie… They join the existing Microsoft AI & Research group, led by research chief Harry Shum, to form three massive engineering groups inside the Redmond tech giant.’
Original source: Windows chief leaving Microsoft as CEO Satya Nadella rolls out massive engineering reorg

Link: Microsoft gets serious about monitoring

“Microsoft’s vision is to deliver tools that can offer a holistic view of services to application architects looking to optimize their software; performance information and debugging capabilities for DevOps and ops pros; insight into KPIs for executives; and information about customer usage to product owners. Microsoft doesn’t yet have a cohesive offering for all of the above, but it has the pieces to enable it and has begun delivering on some integrations across products.”
Original source: Microsoft gets serious about monitoring

What’s in Microsoft Azure Stack

Some BOM’ing of Azure Stack:

Azure Stack is made of two basic components, the underlying infrastructure that customers purchase from one of Microsoft’s certified partners (initially Dell EMC, HPE and Lenovo) and software that is licensed from Microsoft.The software includes basic IaaS functions that make up a cloud, such as virtual machines, storage and virtual networking. Azure Stack includes some platform-as-a-service (PaaS) application-development features including the Azure Container Service and Microsoft’s Azure Functions serverless computing software, plus MySQL and SQL Server support. It comes with Azure Active Directory for user authentication.Customers also have access to a wide range of third-party apps from the Azure Marketplace, including OS images from companies like Red Hat and SuSE, and templates that can be installed to run programs like Cloud Foundry, Kubernetes and Mesosphere.On the hardware side, Azure Stack runs on a hyperconverged infrastructure stack that Microsoft and its hardware vendors have certified. The smallest production-level Azure Stack deployment is a four-server rack with three physical switches and a lifecycle management server host. Individual racks can scale up to 12 servers, and eventually, multiple racks can be scaled together. Dell EMC, HPE and Lenovo are initial launch partners. Cisco plans to offer a certified Azure Stack platform based on its UCS hardware line by the end of 2017 and Huawei will roll out Azure Stack support by the end of 2018.IDC Data Center Networking Research Analyst Brad Casemore says he believes customers will need to run at least a 10 Gigabit Ethernet cabling with dual-port mixing. Converged network interface cards, support for BGP and data center bridging are important too. Microsoft estimates that a full-sized, 12-rack server unit of Azure Stack can supply about 400 virtual machines with 2 CPUs and 7 GB of RAM, with resiliency.

And Lydia explains the “people want private cloud ¯_(ツ)_/¯” angle:

“This is definitely a plus in the Microsoft portfolio,” says Gartner VP and Distinguished Analyst Lydia Leong, but she says it’s not right for every customer. “I don’t think this is a fundamental game-changer in the dynamics of the IaaS market,” she notes, but “this is going to be another thing to compel Microsoft-centric organizations to use Azure.”

Leong expects this could be beneficial for customers who want to use Azure but some reason such as regulations, data sensitivity, or location of data prevents them from using the public cloud. If a customer has sensitive data they’re not willing to put in the public cloud, they could deploy Azure Stack behind their firewall to process data, then relatively easily interact with applications and data in the public cloud.

Source: “Azure Stack: Microsoft’s private-cloud platform and what IT pros need to know about it,” Brandon Butler

Shifting IT spending drives sales-force changes – Notebook

Looking at how company’s arrange their sales (and marketing) organizations is an interesting view into the effect of “cloud” on how IT is used and consumed. This week Microsoft is re-arranging it’s sales force to make it more cloud-friendly, people say.

From what I can tell with my dilettante analyst, Microsoft’s theory appears to be that:

  • sales people need to be more technically savvy on cloud,
  • have more vertical knowledge (how does cloud apply to my industry?), and,
  • target larger accounts (where the top and bottom line revenue is worth having a big sales venture, and to bring in volume and cash to public cloud).

Also, with 75% being outside of the US, it’s a dramatic change internationally.

Here’s some excerpts from coverage:

Summarized by Nicole Henderson:

The company said it is implementing the changes not to cut costs, but to improve how it handles sales; specifically, it said it will use employees who are more knowledgeable about specific verticals so they can sell bigger packages, CNBC reports.

As Microsoft vies for more enterprise cloud clients, having better trained salespeople, who are knowledgeable about a specific vertical, will mean they are better equipped to meet client needs. To that end, Microsoft said in an internal memo that it would split commercial sales into two segments – one targeting the biggest customers and one on small and medium clients. In addition, Microsoft employees will be aligned around six industry verticals – manufacturing, financial services, retail, health, education and government.

See also coverage from CNBC, and The Register’s coverage, e.g.:

With recent changes to its enterprise agreement to exclude smaller companies, Microsoft is focusing on bigger deals that require fewer staff, while everyone else gets shifted onto a per-person consumption payment model for Microsoft’s cloudy services.

We also discussed this briefly in this week’s Pivotal Conversations.

Shifting spending

Meanwhile, while this doesn’t capture all of the market-shift (you’d also want to see the shift from COTS to SaaS, infrastructure software, and then *aaS spend), some recent charting from IDC shows one of the motivations for changing up your sales approach, i.e., IT infrastructure (hardware) money is shifting around to public and private cloud stacks:

In the above, you see the blue bar slowly decreasing in the out-years meaning less “traditional” spend and more “cloud” spend. The pricing dynamics and units shipping in public cloud are all whack compared to private cloud (Google, Amazon, and Azure’s hardware needs are much different than private cloud needs), but looking at the red bar gives you an interesting perspective on new build out at enterprises. And, thus, you can get a sense for shifting buyer behaviors in IT…and why you’d want to re-arrange how you sell to them. See more recent details from IDC.

Link

More numbers on 2016 tech M&A, foreign cash hoards

A bit of a jumbled article for general audiences
, but some more numbers of tech companies’ cash on hand and numbers around 2016 acquisitions:

The value of software deals in 2016 topped $115 billion for acquisitions closed or pending, according to data gathered by Bloomberg. That’s up about 19 percent from 2015.

But:

Overall in 2016, the value of merger-and-acquisition business software deals totaled $117.6 billion.

And:

That doesn’t include the blockbuster tech deal of the year: Microsoft paying $26 billion for LinkedIn. LinkedIn does not fit neatly into the category of business software because of its professional networking tools that are used by workers outside of business hours.

Tech companies have lots of cash abroad. If the Trump folks reduce the tax down to 10%, the theory is many companies would bring that cash “back home” and could use it to buy things, and likely pay our dividends and do share buy backs:

Oracle and Microsoft have more than 80 percent of their cash, near-term cash and short-term investments in foreign subsidiaries, according to recent filings.

Who knows? It’s all a bit of a lamp-post analysis, but, sure: ¯_(ツ)_/¯

Source: Companies Anticipate Big Software Deals, With Help From Trump

ABB & Microsoft – more software eating 3D objects, i.e., IoT

Microsoft helping out ABB with some cloud ‘n’ IoT fun:

The most significant of these is a new alliance with Microsoft, whose Azure public cloud has been chosen to underpin ABB’s cloud, IoT and digital services across the ABB group. The companies will also work together on projects and services, although the extent of this will emerge over time. ABB also announced an internal reorganization and the appointment of a chief digital officer. All of these moves are part of ABB’s Next Level strategy, now in its third iteration, which sets out targets and priorities aimed at maintaining or increasing growth, profitability and value.

The agreement with Microsoft will help ABB offer cloud-based digital services across all its divisions. Functions such as monitoring, analytics, control, billing, forecasting, machine learning and many others will be delivered via applications and services hosted in Azure by Microsoft.

On ABB:

It has annual revenue of $35.4bn (2015) from operations in 100 countries, supplying switchgear, breakers, substations, generators, uninterruptible power supplies and power electronics, as well as management software.

Source: “ABB says the Next Level is digital, and Microsoft will help it get there”.

The new software sales model?

From Gavin Clarke’s piece on Microsoft’s head of sales leaving:

But the sales model had changed; it was becoming less about shipping more boxes at fat margins and more about persuading people they should download your service, buy on a subscription, pay for what you use.

The world of Nadella and the current reality of Microsoft couldn’t be more removed from the world of Turner. Today it’s a more complicated sell: on-premises remains the core of Microsoft’s income – desktop and server – but Microsoft is desperately trying to grow its cloud and data businesses. Neither involves destroying the competition; rather, it’s a more nuanced sale, a sale you don’t win by simply trashing the rivals.

The notion that enterprise tech sales have gone beyond zero-sum is tantalizing, but hard to imagine. Let’s hope so.

Also, the quotes from sales meeting keynotes are so, so sales-y that it’s almost “ugh” feeling.

Outlook is a good, mobile email client

And, when I actually think about what is going on, I’m using Microsoft Outlook on my Apple iPhone to read my Google Gmail.

I’ve used it since back when it was Acompli. It’s good stuff! I’m looking forward to the desktop Outlook working well in OS X (I run the preview and last I checked it didn’t work with GMail, need to check again). What a world!

Outlook is a good, mobile email client

I’m always wary of discounting Office: the closer you are to the corporate world, the more you appreciate its reach, but on the flip side, the further away I get from that world the more I appreciate how much of Office’s importance is based on habit rather than need.

Ben Thompson in his April 30th, 2015 newsletter.

Microsoft targeting $20bn cloud business by 2018, currently at $6.3bn run rate

Microsoft Corp. wants to reach annualized revenue of $20 billion in its corporate cloud business in the fiscal year that ends in June 2018.

At the moment, it’s:

The company last week said it has a current run rate of $6.3 billion for the cloud business, which includes its Azure data-center services and cloud versions of Office software and customer management programs.

Microsoft targeting $20bn cloud business by 2018, currently at $6.3bn run rate

The growth story was, like Amazon, all about the cloud.

Ben Thompson on his latest newsletter, on Microsoft’s earnings.

Microservices is a modern take on software architecture, in which complex applications are composed of small, independent processes communicating with each other using APIs. These services are small, highly decoupled and focus on doing a small task. The rise of Docker, the proliferation of third party developer tools and the increasing reliance on the cloud all play into the growth of microservices.

025: Burn the boats because we’re inventing self-driving cars

Summary

We discuss the 100,000 node OpenStack cluster at Wal-mart, the new new Microsoft, the rumored Apple Car, and the industry analyst market being disrupted. It’s not too shabby this week.

Full show-notes can be found at https://cote.io/sdt/25.

With Brandon Whichard, Matt Ray, and Coté.

SPONSORS:

  • Come learn all about Pivotal Cloud Foundry for free, get hands on, and even see Coté if that’s your thing. We’ll be in Austin, Houston, Cincinnati, Columbus, RDU, Charlotte and more in the March.

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Microsoft’s $5.5bn cloud business

Microsoft (MSFT)’s commercial cloud revenue rose 114 percent in the fiscal 2015 second quarter, marking its sixth consecutive quarter of triple-digit commercial cloud revenue growth. The technology giant’s commercial cloud revenue is now on an annualized revenue run rate of $5.5 billion too.

All they have to do is retain and then convert the office crowd. Should be easy. As an old boss of mine used to say, “just don’t fuck it up.”

Ben has a good analysis of Microsoft from a corporate strategy stand point in his recent podcast.

Microsoft’s $5.5bn cloud business