Microsoft Rides Cloud to a 21% Increase in Profits – The New York Times

Amazon and Google dont have as many existing relationships with large companies as Microsoft, Mr. Keirstead said. Amazon has been furiously hiring sales and marketing staff for AWS, investments that Amazon told investors were a drag on profit last quarter.

They are in the process of building relationships with the Fortune 500, and Microsoft is one of the largest suppliers of tech to the Fortune 500 already and has been for 20 years, Mr. Keirstead said. That is powerful.

In the Morgan Stanley survey, Microsoft was seen as the top vendor for an approach called hybrid cloud, which is popular with large organizations. Hybrid cloud computing lets companies use a single set of tools to manage their information across both remote data centers and their own servers, be it close to a store or in internet-connected machinery.

A measure of Microsofts sales for traditional servers and cloud services was up 33 percent excluding currency fluctuations, indicating the approach continued to gain traction.

Microsoft has continued to move customers from its traditional Office suite of products like Outlook and Excel to its cloud-based Office 365 service. In the quarter, Office 365s commercial sales rose 28 percent excluding currency fluctuations. The company said it had more than 200 million monthly active business users on Office 365.

Microsoft says that productivity tools are the hub of where office workers spend their time, and that moving them to the cloud can give companies more up-to-date tools and data to analyze, like improved security.

The power of that suite is clear in the fast adoption of Teams, a chat and collaboration tool that competes with Slack and Google Hangouts. While Slack has more functionality, analysts say, Teams has become good enough for companies to adopt. Also, because Microsoft bundles it with other Office 365 products, it is available at a very low cost.

That is the new user interface, Mr. Weiss said. That is why Slack is so threatening to Microsoft, and why they are competing so aggressively against it. Microsoft doesnt want you to take that nexus of where you spend your time away from them.

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Microsoft Rides Cloud to a 21% Increase in Profits - The New York Times