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

Cloud vendors are finally acknowledging that the economic slowdown is taking a toll on their revenue, but Microsoft CEO Satya Nadella sees the economy weakening. the world is an opportunity to prove the need for public clouds.

The public cloud allows Microsoft customers to control deployment and scale down based on needs, which can also help customers with rising energy costs, Nadella said. in Microsoft’s most recent quarterly earnings report.

“The thing is, however, from the point of view of consumers – the best way for them to meet their expenses with uncertain demand is to go to the cloud,” the Nadella said. “Now we see the importance of the cloud. So the big winner in all these things is the public cloud because the public cloud helps businesses to avoid the risk of necessary disruption.

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

How does Microsoft do it?

As Microsoft Chief Financial Officer Amy Hood dealt with a slew of bad financial news during the company’s earnings report for the first quarter of the company’s fiscal year 2023 — a quarter that ended in September 30 – Nadella still had many plans to show the company’s growth and stability with new products.

Azure Arc has more than 8,500 customers, more than double last year, Nadella said. Azure Machine Learning’s revenue has exceeded 100 percent for four quarters in a row. And GitHub is at $1 billion in annual revenue and more than 90 billion people are using the service.

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

“It remains our view that the cloud and the platform of the Office 365 / Windows ecosystem will include a larger and better part of Redmond going forward and will ultimately increase the growth and margins (and more) in FY23/FY24 despite this decline,” Wedbush wrote. in a report on Wednesday. “We believe that the transition to the cloud is below 50% penetration and represents a huge opportunity for Nadella & Co. going forward.”

It continued: “Our discussions with customers and partners underscore our belief that MSFT can emerge from this economic storm and ultimately be in a strong position on the other side and the cost reductions and strategic plans are already in place.”

A report Wednesday by the investment bank KeyBanc said that “despite the sudden disruptions in Azure and Windows / PCs, we remain strong on MSFT’s hyperscale cloud and integrated infrastructure. , build application infrastructure, and expand business use.”

A report from Credit Suisse said that despite the reduction in the consumption of small and medium businesses and the wind in the business of Microsoft Enterprise Mobility + Security.

“It is likely that it will continue to weigh on growth in the near future, we see the negative impact of the current environment as more temporary. Similar to previous economic cycles that heavy in growth for ~1-2 quarters, the increase in new jobs and then the growth is restored to normal levels.

Here are some of the things Nadella said during Microsoft’s phone call.