What’s next for the Microsoft cloud

Credit: Microsoft

Unsurprisingly, 2021 has been an important one for Microsoft’s cloud services. And 2022 is set to be even bigger, with Microsoft, the second-largest enterprise public cloud provider, on the verge of building 50 to 100 new data centers per year.

But what exactly is the Microsoft Cloud? It is not a single SKU or service that customers can purchase. It is not synonymous with Azure either. It’s much more complicated and more and more intertwined than that.

Last fall, Microsoft quietly rebranded the set of services that its managers called “commercial cloud” to “Microsoft Cloud”. Many of the company’s employees were already using the term, but since Microsoft began fiscal 2022, it’s now officially part of its earnings terminology. The Microsoft Cloud includes Microsoft 365 / Office 365, Azure and the various Azure services, Dynamics 365, several LinkedIn business services, cloud database and analysis services, Enterprise Mobility + Security, the various “online” versions. ‘Exchange Server, SharePoint Server, and more.

In October, Microsoft announced that Microsoft Cloud generated $ 20.7 billion in revenue for the first quarter of fiscal 22, which means it is at an annual rate of around $ 80 billion. So while you may not be able to buy – or subscribe to – a “Microsoft Cloud” SKU, Microsoft’s sales and partners aim to sell users as many items of the Microsoft Cloud as possible.

What’s likely to happen in the Microsoft cloud in 2022?

On the one hand, Microsoft Cloud is about to receive a new infusion from Nuance. Microsoft has announced plans to buy Nuance in April 2021 for $ 19.7 billion. Nuance’s business is currently largely focused on healthcare; its voice recognition technology helps streamline the process of doctor-patient interaction. Microsoft officials have said Nuance’s technology would be a great fit for many vertical industries beyond healthcare if and when the deal removes obstacles to antitrust regulation.

Speaking of verticals, I expect Microsoft to increase the selling points for its vertical / industrial clouds. These industrial clouds are bundles of Microsoft 365 / Office 365, Azure, Dynamics 365 and various application programming models and interfaces tailored for verticals such as healthcare, retail, finance, manufacturing, non-profit organizations and more.

Microsoft watchers who have been dealing with this for some time may remember Microsoft’s old “Better Together” campaigns, where Microsoft tried to convince customers that they would have the best computing experience if they used a Microsoft-centric product stack that worked “better together.” This is essentially what managers are trying to achieve with vertical clouds. Industry-specific bundles also help sell products like Dynamics 365 and Power Platform that might not be on customers’ minds in the first place when signing license agreements.

On the Azure front, Microsoft will also strive to sell customers the idea that its work in forward-looking areas like Azure Quantum, Azure for Operators (telco), and Azure Space (for those who use imagery and satellite services) – as well as its federal cloud work – are all interdependent and mutually beneficial. A few months ago, Microsoft (again) reorganized its Cloud + AI business unit and created a unique new team of strategic missions and technologies that are supposed to use the “learnings” (a nowadays preferred Microspeak term) from each of these companies in building digital solutions in the others.

I think 2022 could also be the time when we finally start to see Microsoft’s MetaOS strategy manifested in new “modern workplace” products and services. Sources said a year ago that Microsoft was working to bring together Microsoft Graph, Microsoft Search and Fluid Framework – coupled with building blocks that have become essential to its Office suites like Whiteboard, Planner, Lists, ToDo – to create a ” MetaOS “platform for working and playing. (MetaOS has nothing to do with the Metaverse, in case you were wondering, but has everything to do with Teams, Outlook, and the rest of Office.)

AI will undoubtedly be a key and oft-referenced component of Microsoft’s MetaOS plans and platform, as it will also be for Azure. Microsoft has increasingly taken its point of view on “AI on a large scale”. At Microsoft, AI at Scale aims to provide customers with access to large-scale AI models, cognitive services, and compute-intensive resources, all in the form of Azure services.

And Microsoft will no doubt continue to hit the platforms and data services drums in 2022 as another area where officials believe it can grow the Microsoft cloud. Keep an eye out for Microsoft President James Phillips’ Digital Transformation Platform Group, another place where Microsoft will push the story of full integration, not only with the aforementioned industry clouds, but also through Dynamics. 365, Power Platform, Azure AI Platform, Azure Data Platform, and Azure IoT Platform.

Better Together is back, baby. And Microsoft will sell the heck of the concept with its growing family of Microsoft Cloud services in 2022 and beyond.

About Jon Moses

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