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Phil Wainwright comments on Ray Ozzie statements concerning the Microsoft Cloud Strategy. Phil of course thinks MS is in trouble.
It’ll be cheaper to put apps in the cloud than to run them on your own servers:
“It’s an inevitable business. The higher levels in the app stack require that this infrastructure exists, and the margins are probably going to be higher in the stack than they are down at the bottom … Somebody who is selling [business] apps is going to build in, more than likely, the underlying utility costs within their higher-level service. It will still be cheaper to do those things on a service infrastructure than it is on a server infrastructure.”
Taken together, these statements — by the company’s chief strategy officer, no less — add up to a huge strategic shift under way within Microsoft. They suggest that, in five years’ time, the company will be unrecognizable compared to today, with services revenues taking a significant share while licence revenues dwindle.
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