Microsoft chairman John Thompson explains why CEO Satya Nadella is poised to win the cloud wars (MSFT)

Microsoft CEO Satya Nadella

Cloud computing has been a mixed bag for most traditional tech companies.
Microsoft is the only old-school software company that’s become a cloud computing powerhouse, and is now considered the only credible threat to Amazon’s dominance of the cloud market.
In an interview with Microsoft chairman John Thompson, Thompson says there were two major factors to how CEO Satya Nadella pulled that off.
Microsoft had to become willing downgrade the importance of its flagship business, Windows.
But, more importantly, Microsoft had to change its overall attitude.
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Cloud computing has drastically changed the enterprise tech industry. Businesses no longer want to spend their nearly $4 trillion a year buying all their own IT equipment and managing it themselves. They want to rent that stuff, hosted and maintained by their IT suppliers, and pay only for what they actually use each month.

Companies that grew up as cloud players — like Amazon Web Services, Salesforce, Workday, ServiceNow, Dropbox, Slack, or Twilio — have all zoomed to prosperity under this new love for cloud, while Google quickly expanded into that niche.

But old-school vendors like HP, SAP, or VMware failed at their original ambitions to become cloud kingpins themselves. Instead, they’ve partnered-up with those who had successfully built clouds. Oracle, for example, came late to the cloud, and is trying to play catch up now, with mixed results so far.

Only Microsoft has successfully crossed the chasm from old-school IT company into cloud powerhouse, with businesses like the Azure cloud platform and Office 365 subscription suite both doing gangbusters with customers.

By all accounts, Microsoft is second only to market leader Amazon Web Services in the cloud world, and there are a lot of indicators that it’s gaining ground. For instance, in Morgan Stanley’s most recent quarterly survey of 100 CIOs, all of them said they expected to spend more on cloud computing, specifically with AWS and Microsoft.

Read: Trillion-dollar Microsoft is gearing up for another potentially ‘unprecedented’ growth spurt

Microsoft chairman John Thompson tells Business Insider that the secret to Microsoft’s cloud success hinged on a difficult decision that CEO Satya Nadella made early on in his five-year reign as the boss.

He had to downgrade the importance of Microsoft’s flagship products: Windows and Office. And he had to overhaul the company’s culture to make it happen.

Microsoft’s cloud success is “clearly attributable to Satya. And while Windows was a very powerful platform for the company for many, many years, it clearly has evolved. And that it’s not just about cloud. It’s about what services you offer in the cloud,” Thompson told Business Insider.

Not only did Microsoft have to offer its most popular, and highly profitable, software on the cloud — something it had actually been doing for years — it had to push customers to buy the cloud products instead of the more traditional products.

From enemies to friends

Equally importantly, Microsoft had to change its not-invented-here culture to win at cloud.

“At the core, the company has evolved to be an open source …read more

Source:: Business Insider – Tech

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