Microsoft’s Cloud Will Be Profitable, Executive Says
October 28, 2008: 09:57 AM EST
LOS ANGELES -(Dow Jones)- Microsoft’s newly announced "cloud computing" platform, Windows Azure, will be profitable for the company, the executive who runs its server business said Monday.
"We will wind up having a business model that we think will be profitable," Bob Muglia said, although he added that building out the platform would produce certain capital costs initially.
Microsoft Monday unveiled Azure, a broad strategy to migrate its development platforms into the "cloud," or allowing Microsoft developers to write applications and store and operate them on Microsoft’s own machines.
Although it’s not clear when the service will be profitable, Muglia said Microsoft should be able to begin to generate profits from the services fairly quickly.
"As we start charging customers we will start to be able to make money," Muglia said in an interview.
"We’re in investment mode now," he added.
Although the platform requires vast data centers to run customers’ operations, Muglia said much of the investment toward building that infrastructure had already taken place and that there wouldn’t be a significant step-up in capital expenditure.
He also said there wouldn’t be any one single business model for cloud computing, and that the payment options could vary from service to service. "I think what you’ll see is different business models appropriate for different services," Muglia said. "Some services like CRM or Sharepoint might make sense to be sold per user, while some will be ad-funded."
-By Jessica Hodgson, Dow Jones Newswires; 415-439-6455
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(END) Dow Jones Newswires 10-28-08 0957ET Copyright (c) 2008 Dow Jones & Company, Inc.
October 28, 2008