Microsoft’s Nadella: Public Cloud Will Be ‘The Big Winner’ In Down Economy

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Wade Tyler Millward

‘The big winner in all of this is the public cloud because the public cloud helps companies counter demand risk,’ said Microsoft CEO Satya Nadella.

Cloud vendors have acknowledged that the sluggish economy has affected their profits, but Microsoft CEO Satya Nadella sees the weaker global economy as an opportunity to prove the need for public cloud .

Public cloud allows Microsoft customers to control uploads and downloads based on demand, which can also help customers with rising energy costs, Nadella said during the latest earnings call. Microsoft’s latest.

“But the thing is, from the customer’s point of view – the best way for them to match the costs of the uncertain demand is to move to the cloud,” said Nadella. “So we see the value of the cloud. So, the big winner in all of this is the public cloud because the public cloud helps businesses counter demand risk. ”

[RELATED: Microsoft Reports PC Trouble, Cloud Growth, SMB ‘Deal Moderation’]

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While Microsoft Chief Financial Officer Amy Hood handled most of the bad financial news during the company’s earnings report for the first quarter of fiscal year 2023 – the quarter ending September 30 – Nadella still had many measures to show the growth of the company with established and new products.

Azure Arc has more than 8,500 customers, more than double from a year ago, Nadella said. Azure Machine Learning revenue has grown more than 100 percent for four consecutive quarters. And GitHub is $1 billion in annual recurring revenue with over 90 billion people using the service.

At least three investment banks have expressed confidence in Microsoft’s long-term capabilities.

“The thesis remains that the cloud and the Office 365 / Windows environment will comprise a larger and larger part of Redmond moving forward and will ultimately encourage growth and margins (and more) in the FY23/FY24 despite this setback,” Wedbush wrote. in a report Wednesday. “We believe cloud migration is still less than 50% and represents a huge opportunity for Nadella & Co. moving forward.”

It continued: “Our conversations with customers and partners reinforce our confidence that MSFT can weather this economic storm and ultimately be in a stronger position.” on the other hand with discounts and existing strategic measures.”

A report on Wednesday by investment bank KeyBanc said that “despite cyclical fluctuations in Azure and Windows/PCs, MSFT’s hyperscale cloud and converged infrastructure remain long-term , application development platform and business portfolio expansion.”

A report from Credit Suisse said that despite the decline in the consumption of small and medium-sized enterprises and the storm in the Enterprise Mobility + Security business of Microsoft.

“Likely to continue to weigh on growth in the near term, we view the negative impact of the current uptrend cycle as more temporary. Similar to previous uptrend cycles that weighed on growth for about ~1-2, new load increases followed that led growth back to a more normal trend.”

Here’s more on what Nadella had to say during Microsoft’s latest earnings call.

    Learn about Wade Tyler Millward

Wade Tyler Millward

Wade Tyler Millward is an associate editor covering cloud computing and channel partner programs of Microsoft, IBM, Red Hat, Oracle, Salesforce, Citrix and other cloud vendors. He can be reached at [email protected]


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