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Azure Might be Woefully Inefficient and Unprofitable

posted by janrinok on Friday October 11 2019, @08:35PM   Printer-friendly
from the smoke-and-mirrors dept.

An Anonymous Coward writes:

https://medium.com/@wtfmitchel/azure-vs-moores-law-2020-65a6fe67e31b

As a result of undershooting their projected capacity by such a large margin, Microsoft was way off on their capacity projections with Azure and only built roughly 1/3 of the data center capacity that was actually necessary. Consequently, they had to over-provision their existing data centers to the point of tripping the breakers and rapidly fill the gaps with an excessive amount of leased space to meet the demand that they projected. All of which effectively doubled the amount of leased space in their portfolio from 25% to 50%, extended their break-even to nearly a decade, and killed their hopes of profitability any time soon.

While an honest mistake and not being able to foresee the future is forgivable, knowingly omitting a mistake of this magnitude is criminal when considering how much Microsoft is hedging its future on Azure. On top of supplying misleading revenue metrics in their quarterly 10K filings to fortify a position of strength and being second only to AWS, Microsoft seems to be wary about reporting Azure's individual performance metrics or news of these failings that would enable investors to conclude this for themselves. Instead, Microsoft appears to be averaging out Azure's losses with their legacy mainstays that are profitable by reporting its revenue within their Intelligent Cloud container instead of itemizing it.

Previously:

Original Submission

 
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  • (Score: 2) by PartTimeZombie on Friday October 11 2019, @09:51PM (3 children)

    by PartTimeZombie (4827) on Friday October 11 2019, @09:51PM (#906065)

    I'm not sure GM is a very good comparison to make. They needed $50 billion from taxpayers to stay afloat not too long ago, and couldn't pay back more than $11 billion of that.

    They also laid off 14,000 workers last year.

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  • (Score: 0) by Anonymous Coward on Saturday October 12 2019, @12:32AM

    by Anonymous Coward on Saturday October 12 2019, @12:32AM (#906124)

    But bah gawd dem quarterlies!

  • (Score: 0) by Anonymous Coward on Saturday October 12 2019, @10:21AM (1 child)

    by Anonymous Coward on Saturday October 12 2019, @10:21AM (#906293)

    Will they ever pay it back?
    Does this mean the US government now owns GM?
    Why not?

    • (Score: 0) by Anonymous Coward on Saturday October 12 2019, @11:01PM

      by Anonymous Coward on Saturday October 12 2019, @11:01PM (#906451)

      The U.S. invested 51 Billion dollars into the GM bailout. They sold all their stock on Dec. 9, 2013, for 39 Billion dollars, leaving a shortfall of 12 Billion dollars. And no, that money will never be repaid.