Tag: azure

Microsoft sees profit rise thanks to cloud

Ary Pleysier - Beach View with Boats - Wikimedia CommonsSoftware King of the World Microsoft reported some mixed results with a 3.6 percent rise in fiscal second-quarter profit but a decline in margins in its cloud operations.

The cloud was Microsoft’s shining star in the results, but it seems that was due to reduced margins in in the unit that includes its flagship cloud platform Azure.

Chris Suh, head of Microsoft’s investor relations said that gross margins for Microsoft’s so-called “commercial cloud” business, which includes Azure and versions of its online Office 365 product sold to businesses, were 48 percent.

That is down from last quarter’s 49 percent but up from 46 percent a year ago. The figure is important because it is a sign of the actual profit made of Microsoft’s cloud products, which the company does not publish.

Vole’s Azure competes with cloudy products from Amazon.com, Google, IBM and Oracle Corp.

Suh admitted that Vole was no longer at Amazon’s margin.

“Their infrastructure business is much larger. They have the benefit of scale. We track more like what Amazon was when they were closer to our size.”

Chief Financial Officer Amy Hood said there was a “material improvement” in Azure margins since last quarter.

Nadella said the company thinks of its cloud offerings as comprehensive lineup of software and infrastructure, as it did with its historical business as a combination of products with different margins, like Office and Windows Server.

“We have a cloud strategy that is not just about infrastructure,” Nadella said, pointing out differences with Amazon Web Services.

Revenue from Microsoft’s ‘Intelligent Cloud’ business, which includes Azure, along with other data center software, rose 8.0 percent to $6.9 billion in the quarter. That beat analysts’ average estimate of $6.73 billion. Microsoft’s estimates for next quarter were $6.45 billion to $6.65 billion, only slightly higher than FactSet’s $6.61 billion estimate.

Azure’s revenue grew 94 percent year over year which is the lowest growth rate since Microsoft began disclosing the number in 2015, and down from 121 percent the previous quarter.

Sales of Office 365 to businesses rose 49 percent, down from 54 percent in the previous quarter.

Sales in Microsoft’s personal computing business, which includes its Windows software, once the bedrock of the company, fell 5.0 percent to $11.8 billion, slightly beating the rate at which personal computer sales fell in the quarter.

The company’s net income rose to $5.20 billion in the quarter ended Dec. 31, from $5.02 billion a year earlier. Its adjusted revenue was $25.838 billion, ahead of analysts’ average estimate of $25.298 billion.

Microsoft Azure doing rather well on Linux

microsoft-open-sourceSoftware king of the world Microsoft has made a killing by enabling its Azure virtual machines to run Linux.

When Vole started the service 25 percent of its Virtual Machines were running Linux and now it is nearly one in three.

During his keynote at DockerCon 2016 in Seattle, Azure Chief Technology Officer Mark Russinovich said that Microsoft was adding more container support to its cloud and server products.

Russinovich showed off Windows Server support coming soon to the company’s Azure Container Service (ACS) while everyone yawned.

Microsoft made Azure Container Service generally available in April 2016, but for Linux containers only. Last year, company execs said Microsoft also would bring Windows Server support to ACS.

ACS allows developers to orchestrate applications using Apache Mesos or Docker Swarm. Users can migrate container workloads to and from Azure without code changes.

Russinovich showed a preview of SQL Server on Linux running on a Docker container. SQL Server for Linux is currently in private preview and is due to be available by mid-2017.

Russinovich announced that Docker Datacenter is available in the Azure Marketplace. In addition, Docker Datacenter can manage a hybrid container-based application running across Azure — and for the first time — Azure Stack on premises.

The way that Microsoft is integrating Linux into its cloudy world is amazing, given that it is not that long ago that its CEO called Linux a cancer and was doing its best to kill it off.

Microsoft creates its own FreeBSD image

microsoft-open-sourceSoftware giant Microsoft has made its own version FreeBSD 10.3 image so that the Open Saucy OS is available and supported in Azure.

Jason Anderson, principal PM manager at Microsoft’s Open Source Technology Centre says Redmond “took on the work of building, testing, releasing and maintaining the image” so it could “ensure our customers have an enterprise SLA for their FreeBSD VMs running in Azure”.

Vole said that it did it to remove that burden from the FreeBSD Foundation, which relies on community contributions.

Microsoft said that its work on FreeBSD will be shared.

“The majority of the investments we make at the kernel level to enable network and storage performance were up-streamed into the FreeBSD 10.3 release, so anyone who downloads a FreeBSD 10.3 image from the FreeBSD Foundation will get those investments from Microsoft built in to the OS,” he said.

Anderson added that Vole would stay current and make the latest releases available shortly after the FreeBSD Release Engineering team releases them.

“We are continuing to make investments to further tune performance on storage, as well as adding new Hyper-V features.”

It will also support its distribution when it is run in Azure.

Apparently, Microsoft has worked out that software vendors use FreeBSD as the OS for software appliances. This was Microsoft’s 2012 decision to ensure FreeBSD could run as a guest OS under Hyper-V.  However, Vole thought it was better to have something more predictable for Azure.

This is not the same Microsoft from the 1980s and things have improved greatly. Unless you don’t want to download Windows 10 of course. Then it really is evil as it ever was.



Microsoft doing well thanks to Azure

Microsoft campusSoftware king of the world, Microsoft is still able to coin it in,  thanks mostly to its Azure cloud product.

Microsoft reported earnings for its third fiscal quarter of 2016, including revenues of $22.1 billion. In Q3 2015, Microsoft saw $21.73 billion in revenues and most of the industry is having a snooze at the moment.

Wall Street had expected Microsoft to earn $22.09 billion in revenue so it did a little bit better than they expected.

Microsoft CEO Satya Nadella told the assorted throngs that organisations using digital technology to transform and drive new growth increasingly choose Microsoft as a partner.

“As these organisations turn to us, we’re seeing momentum across Microsoft’s cloud services and with Windows 10, ” he said, perhaps over optimistically.

That said the  results from Office and Office 365 (commercial and consumer customers), grew 1 percent to $6.5 billion. Office 365 had a relatively slow quarter, adding just 1.6 million subscribers to hit 22.2 million. Office commercial products and cloud services revenue grew 7 percent with Office 365 revenue up nearly 63 percent.

Steady Office 365 growth is not much of a surprise, but it does appear to be grinding to a halt. So it looks like Vole’s cunning plan to convert its traditionally most lucrative software business into a subscription revenue stream may be running out of steam.

This segment, which includes results from server products and services (including Windows Server and Azure), grew three percent to $6.1 billion.

Server products and cloud services revenue grew five percent. But Azure revenue, which grew 120 percent. Use of Azure compute and Azure SQL database more than doubled year over year.

Microsoft this quarter also shared that its commercial cloud business exceeded a $10.0 billion. The company previously projected that it expects this number to hit $20 billion by 2018.

Windows licensing and devices (Surface, phones, and Xbox), decreased 1 percent to $9.5 billion. Its OEM revenue also declined two percent. Vole put a brave face on this pointing out that the decline was acceptable because it still “outperforms the PC market.”

Microsoft saw Surface revenue jump from $713 million in Q3 2015 to $1.11 billion in Q3 2016. The Surface Pro 4 and the Surface Book seem to be selling well.

Steve Ballmer’s legacy to the company, its phone business revenue declined 46 percent. In Q3 2016, Microsoft sold 2.3 million Lumia devices, down from 8.6 million in Q3 2015 which is a 73 per cent fall.

Advertising revenue from this group, excluding traffic acquisition costs, grew 18 percent. Microsoft attributed this to Windows 10, which includes tighter Bing integration.

Xbox Live monthly active users grew 26 percent year over year. The service now has 46 million players, which is actually down from 48 million last quarter.


Microsoft aims for 10,000 leaks under the sea

david-fincher-20000-leagues-under-the-seaSoftware King of the World, Microsoft is experimenting with putting data centres underwater.

Microsoft Research has deployed a small data centre in a watertight container at the bottom of the ocean –and created an underwater Azure cloud.

The advantage is that the data centres can be cooled by the surrounding water.  It is supposed to be good for the fish life and would not Fry Nemo.

Project Natick group at Microsoft Research said that the centre could even be powered by tidal energy.

Vole has been trying its experimental underwater data centre one kilometre off the Pacific coast of the US since August.

The project aims to show it is possible to quickly deploy “edge” data centres in the sea, close to people who live near the coast.

The group put one server rack inside a cylindrical vessel, named Leona Philpot after a character in the Halo Xbox game. The eight-foot (2.4m) diameter cylinder was filled with unreactive nitrogen gas, and sat on the sea bed 30 ft (9m) down, connected to land by a fibre optic cable.

The container was packed with sensors to prove that servers would continue working the vessel wouldn’t leak, and would not affect local marine life. Then it deployed commercial Azure web loads on the system.

The only issue with the project is the computers involved in the project which will have to run for years without any physical attention.

The project thinks that with the end of Moore’s Law the speed at which servers are going to need to be refreshed is going to slow down.

”We see this as an opportunity to field long-lived, resilient datacenters that operate ‘lights out’ – nobody on site – with very high reliability for the entire life of the deployment, possibly as long as ten years.”

The first commercial version -would have a 20 year lifespan, and would be restocked with equipment every five years, as that’s the current useful lifespan for data centre hardware.

IBM sets up block chain operation

suitsBig Blue has announced it will lead the development of a new blockchain financial transaction infrastructure called Open Ledger.

This is designed for major banking and financial institutions including Wells Fargo, JP Morgan and the London Stock Exchange

The project will create a more flexible exchange ledger of exchange and will share some concepts to the blockchain that underpins Bitcoin and other cryptocurrency systems. The new system will be ‘semi-private’ with an open source approach to development.

Open Ledger will be overseen by the non-profit Linux Foundation. IBM has been researching blockchain technology for the past year together with Digital Asset Holdings. The pair are to be joined by Microsoft, VMware, Fujitsu, Mitsubishi UFJ Financial Group and financial application-builder SWIFT.

Marley Gray, Director of Technology Strategy US Financial Services at Microsoft Azure, also told Fortune that the new system could provide additional security and operate as a major impediment to stock market gaming. It might also kill off the need for ‘expensive middlemen’, or the need to put trust into particular individuals and organisations.


Microsoft jumps on internet of things bandwagon

windows-10-start-menu-customised-live-tilesMicrosoft, like Intel, appears to believe its future is in the internet of things (IoT).

That’s according to Richard Edwards, principle research analyst at Ovum.

He said that vendors of desktops, notebooks and tablet computers hope Windows 10 will bring back people who have endured “the Windows 8 debacle”.

But Microsoft, said Edwards – while it is hoping Windows 10 will do well too – doesn’t care about the mobile operating systems market.

Instead, he said: “It’s about gaining a strong foothold in the next multibillion dollar market, the internet of things”.

Microsoft wants to provide an OS and services for “things” that aren’t PCs, tablets or smartphones.

Satya Nadella, the Microsoft CEO, is “cloud savvy” and has developed three flavours of Windows 10.

One is aimed at IoT for devices using X86 or ARM chips, 256MB of memory, 2GB storage and with universal apps and drivers; one for mobile devices using ARM chips; and one for industry devices.

He said: “Microsoft continues to remind partners and device builders that Windows IoT is free for small devices and is urging manufacturers to consider the Windows operating systems as they build their new, intelligent, connected devices.”

Apparently it wants companies making micro kiosks, industrial machines, robots and medical devices to adopt Windows 10.

And then Microsoft has Azure IoT services.

“Microsoft clearly understands that many paths will open up along the IoT value chain, so it is building a range of components that partners can combine, enhance and extend as the market evolves,” he said.

Microsoft cuts Azure price

The price war on cloud prices between Microsoft, Amazon and Google is heating up and everyone is slashing the cost of their service.

Today it was the turn of Microsoft to announce cuts in the price of its Azure service in a move that will keep its promise of matching the price of Amazon . Amazon announced price reductions last week, Microsoft followed up with theirs today.

Microsoft made an announcement that “Consistent with our previously announced commitment to match Amazon on prices for commodity services, we are cutting prices on compute by up to 35 per cent and storage by up to 65 percent.”

Vole said that economics are a primary driver for some customers adopting cloud, and stand by our commitment to match prices and be best in class on price performance.

In addition Vole announced a new tier of General Purpose Instances called “Basic” (A0-A4) that offers similar machine configurations as the Standard tier of instances offered today (Extra Small [A0] to Extra Large [A4]).

This will end up 27 percent less than the corresponding instances in use today. These will still be around but will be called “Standard” and will not include load balancing or auto-scaling, which are included in Standard.

Microsoft’s announcement is showing how cutthroat the cloud market is becoming and how much difficulty Amazon is going to have staying on top.

Google started the current price war two weeks ago citing the plummeting costs of hardware. It was followed by Amazon matching the cuts.

However, it is good news for companies thinking of moving onto the cloud. The continual cloud price cuts make it hard to justify continuing to run in-house operations, which would be far more expensive, both in terms of hardware costs and maintenance costs. 

Microsoft slips Azure in under the radar

While Microsoft’s Azure software is not hitting the headlines much, it turns out that the software is being snuck in under the radar of many of Vole’s products.

Windows Azure is Microsoft’s cloud platform.  It was recently expanded with new capabilities.  But what is raising an eyebrow or two is how Microsoft is integrating Azure into so many of its other products.

According to IT World, in some cases Volish punters are hardly realising they’re shifting to the platform.

It is all part of a cunning plan from Vole to get customers onto Azure in a small way so that they will use the service in anger  when it comes time to move to something bigger.

One thing, which Microsoft announced yesterday, was Windows Azure Backup Services. This is a simple offering for backing up Windows Server to the cloud.

But Microsoft is being jolly clever about it.  It does not mention the word cloud in the package.  It lets businesses that are running servers on-premises to set a regular back up to Azure for data on their servers.

But it is the sort of thing that makes a good first step into the public cloud for businesses.  And Microsoft hopes that once its customers have moved past baby steps they will want the full monty.  It is then that Microsoft can step in and point out that they have been using Azure for a while now and know how it works.

This “let’s try to get our foot in the door” approach is required because competition for enterprise cloud customers is tougher than 2,000 year old bacon strips and about as hard for some customers to swallow.

Vole needs to beat Amazon Web Services, and other long-time enterprise vendors like HP and IBM.  

Microsoft talks about Azure cloud security

Microsoft has added its Azure cloud platform to the Cloud Security Alliance’s STAR security registry.

The registry is the place where cloud service providers post information about how secure their cloud is.

There is a hope that STAR will be placed where customers can easily compare and contrast security features from providers they may consider working with such as the company loo. But so far not enough enough outfits have signed up. It was started last year but almost six months after its launch, only three companies could be bothered to fill out the 170 question form.

Vole was one of them. It filled in the form providing the security information for Microsoft Office 365. The others were Mimecast and Solutionary.

Microsoft claims that Azure’s “core services” are ISO 27001 certified and “this work is planned for the remaining features of the platform.”

It has several “core” services, which refer to compute, storage, and virtual network features. According to Computerworld Microsoft’s global foundation services, which run Microsoft’s online services, also have the smiling accountant logo from the American Institute of Certified Public Accountants Statement of Auditing Standards (SAS) No. 70 audits.

For those who like accounting standards the SAS 70 audits have nothing to do with being the first in and the first out of a Microsoft cloud.