Posts Tagged ‘ cloud ’


Commercial cloud revenue more than doubled, but consumer software sales were disappointing

Cloud services like Azure and Office 365 were once again the stars in Microsoft’s quarterly earnings report, with revenue from those products more than doubling from a year earlier.

They helped lift Microsoft’s overall revenue by 8 percent last quarter, to $26.6 billion, the company said Monday. That was higher than analysts had expected.

But restructuring costs and a tax adjustment led to a drop in profits. Microsoft posted net income of $5.86 billion for the quarter, which ended Dec. 31, down nearly 12 percent year-on-year. That was equivalent to $0.71 per share, matching the estimate of analysts polled by Thomson Reuters.

“Our commercial cloud services delivered triple-digit revenue growth for the sixth consecutive quarter,” CFO Amy Hood said on a call to discuss the results. “Office 365 continues to be priority for CIOs, as both existing and new customers move to the cloud,” she said. “This transition accelerated with 45 percent of our renewal seats in Office moving to the cloud this quarter.”

Microsoft’s Surface Pro 3 tablet performed well, and revenue from the company’s Surface hardware climbed 24 percent to pass $1 billion for the first time. The XBox platform struggled, however. Revenue fell 20 percent, or $703 million, thanks to lower console shipments and the transition from Xbox 360 to Xbox One, Microsoft said.

Microsoft generated $2.3 billion in revenue from a business that didn’t exist only a year earlier: phone hardware. Were it not for Nokia’s old business, Microsoft would have been a poorer performer last quarter, at least in terms of sales.

The company’s Devices and Consumer Licensing segment looked bleak, with Microsoft reporting $4.2 billion in revenue from consumer licenses — a 25 percent drop over the year-ago quarter. Licensing revenue includes money from OEMs for the Windows operating system, as well as license revenue for Windows Phone, consumer editions of Office 2013 (as opposed to the subscription-based Office 365 Home Premium), and intellectual property for consumer products.

Although Microsoft’s cloud performance stole much of the attention, lurking not far behind was Windows 10 — especially, how its offer of one free subscription year to upgraders will impact future revenue.

Windows 10 will create opportunities for further monetization down the road, CEO Satya Nadella said.

“Overall, I think the most strategic objective for us is to get developer momentum with Windows 10, and that’s where we’re focused with a lot of different actions,” he said.

“One is the one unified developer platform — I think that’s perhaps the most strategic piece of Windows 10, along with the unified Store,” he said. Coupled with the upgrade offer, he said, “we are creating a great opportunity for every developer to write these universal Windows applications.”

Forthcoming changes to the Windows 10 Desktop will enable these universal apps, on all platforms, to be more “naturally discoverable” on the most used part of Windows — which he acknowledged was the Desktop, not the Start Screen.

But it was the cloud products that stole the day. The creation of premium tiers for some of Microsoft’s cloud services was a key contributor to increasing profits this past quarter, Hood said. As Nadella explained, the premium tiers now available for Office 365, Enterprise Mobility Suite, and Dynamics CRM have helped turn all three categories into high-growth businesses.

When customers deploy applications and other virtual services on top of Azure, he said, it gives Microsoft the opportunity to attract further business. A company might build a mobile front end on their Azure app using Azure Mobile Services or Media Services, for instance.

The way Microsoft builds its hosting infrastructure helps keep the cost of hosting thos services down, Nadella said. It has one common infrastructure for Office 365, XBox Live and other services. “We don’t have different infrastructures for these different services,” he said.


 

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Corporate departments act on their own, contending IT is too slow in creating a path to cloud services

IT departments need to watch out for business units or even individual workers going rogue and bypassing IT to go straight to the cloud.

Theres a tug-of-war tension in the enterprise right now, said Gartner analyst Lydia Leong. IT administrators very rarely voluntarily want to go with the public cloud. I call this the turkeys dont vote for thanksgiving theory. The people who are pushing for these services are not IT operations people but business people.

When marketing, events or other corporate business units conclude that IT is dragging its feet on the way to the cloud, the contract for the services themselves. IT often doesn’t discover the move until oit shows up in the tech expenses papers.

Right now business strength lies in going around IT, said Rob Enderle, an analyst at the Enderle Group.

Enterprise IT often sees the cloud as a risk. If you go to a large IT meeting, theyll generally place the public cloud as one of their top three or four threats because their line organizations, like marketing or manufacturing, go around IT to set up their own cloud service deals. They can get something cheaper and faster than they could by going through IT but its probably not compliant, he added.

Several analysts said theyve talked with enterprise IT executives who are facing such issues. None of the execs, though, want anyone to know its happening to them.

Jeff Kagan, an independent analyst, said the problem lies in the fact that these are still the early days of corporate cloud services use. Companies lack rules for the technology and users are more eager than IT try it out.

This is the wild, wild West where there are no rules, he added. People are used to storing their own information on their own laptop. Storing it on the cloud doesnt seem to them all that different from what theyve been doing. Were stepping into this cloud world bit by bit and every company has different challenges. This affects many of them.

The Bring Your Own Device (BYOD) trend has contributed to the user push to the cloud, analysts say.

People have gotten pretty comfortable using their own smartphones and tablets at work. IT has had to adapt and learn to manage a network that theyre not totally able to control.

People, who dont want to wait for IT to catch up will contact companies like Google or Amazon directly and simply start storing data in the cloud.

It’s also about departments using clouds to get around budget constraints and a lack of capacity in IT, said Dan Olds, an analyst at Gabriel Consulting Group.

In a lot of ways, this reminds me of the 90’s when departments went wild with building their own data centers and IT capabilities. In a lot of cases, that resulted in higher costs, security vulnerabilities, and poor integration, Olds said.

When IT is left out, its personnel has no idea how secure the clouds are or exactly where the information is being stored. It also means IT can’t negotiate the best deal — one that could encompass many different departments or data stores.

Best case, organizations might end up spending more on cloud services than they would if they mounted the service on systems the data center already owns, said Olds. Worst case, the organization could find that critical data is now outside their firewall and perhaps could be accessed by folks who shouldn’t be able to see it.

Since analysts doubt IT can stop businesses from bypassing them on a whole-scale level, they say the tech execs need to set up strong cloud governance policies.

Its not really acceptable for IT to say no when someone wants to use the cloud, said Leong. They need to set up service agreements with approved providers and set up controls for how secure information needs to be. How do they provide risk management? How do they make this work instead of just saying, You cant do this.

Every time we take a step further into the information age, its unprotected, said Kagan. IT says theyre swamped just keeping everyone connected. They dont really have the time to proactively protect against future threats. They have to make the time.


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Tech salaries jump 5.3%, bonuses flat

Written by admin
January 30th, 2013

Tech salaries jump 5.3%, bonuses flat
Tech and engineering pros reported the largest salary jump in more than a decade, according to career site Dice

Average salaries for tech pros climbed 5.3% to $85,619 last year, up from $81,327 in 2011. It’s the largest salary jump in more than a decade, according to career site Dice, which specializes in jobs for tech and engineering professionals.

Entry level talent (two years or less experience) waited three years to see an increase in average annual pay — and the market made up for the stagnancy with an 8% year-over-year increase to $46,315. At the other end of the spectrum, average salaries for tech professionals with at least 15 years of experience topped six-figures for the first time, growing 4% to $103,012.


2013 JOB WATCH: Top 11 metro areas for tech jobs

“Employers are recognizing and adjusting to the reality of a tight market,” said Scot Melland, CEO of Dice Holdings, in a statement. “The fact is you either pay to recruit or pay to retain and these days, at least for technology teams, companies are doing both.”

Tech bonuses were slightly more frequent — 33% of respondents got one in 2012 compared to 32% in 2011 — but slightly less lucrative at an average of $8,636 (down from $8,769). [Related story: “Outlook for IT bonus pay murky”]
tech salaries

“In the early stages of the recovery, companies were staying flexible by using performance pay to reward their top performers,” Melland said. “Now, companies are writing the checks that will stick. With a 3.8% tech unemployment rate, no one wants to lose talent.”

By location, Pittsburgh tech pros saw the largest salary increase, up 18% year/year to $76,207. Six other cities also reported double-digit growth in salaries — which is the most ever registered by the Dice Salary Survey.

San Diego (+13% to $97,328)
St. Louis (+13% to $81,245)
Phoenix (+12% to $83,607)
Cleveland (+11% to $75,773
Orlando (+10% to $81,583)
Milwaukee (+10% to $81,670)

Silicon Valley remains the only market where tech professionals average six-figure salaries ($101,278).

Across the U.S., big data skills are in demand, as evidenced by $100,000+ salaries for tech pros who use Hadoop, NoSQL and MongoDB. By comparison, average salaries associated with cloud and virtualization are just under $90,000 and mobile salaries are closer to $80,000, Dice reports.

“We’ve heard it’s a fad, heard it’s hyped and heard it’s fleeting, yet it’s clear that data professionals are in demand and well paid,” said Alice Hill, managing director of Dice.com. “Tech professionals who analyze large data streams and strategically impact the overall business goals of a firm have an opportunity to write their own ticket. The message to employers? If you have a talented data team, hold on tight or learn the consequences of a lift-out.”

Looking ahead to the current year, 64% of tech professionals are confident they could find a favorable new job in 2013.

Dice surveyed 15,049 employed tech professionals between Sept. 24 and Nov. 16, 2012, for its annual Salary Survey.


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