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:
(Score: 1) by brkpt on Saturday October 12 2019, @08:51PM (1 child)
They are number 2 in the cloud business and as a consultant I've seen a lot of companies building products that weren't feasible before Azure abstracted away so many complexities not just like classic scaling, but resource intense computations such as language processing. Any shortfall in predicting the necessary investment in data centers will be irrelevant considering the future revenue from companies using Azure to speed up development of their products and accepting their resulting vendor lock-in.
Also, putting their cash cow Office into the cloud with new features was a smart move. So many companies depend on Office and there is no competition in that space.
(Score: 3, Informative) by DannyB on Tuesday October 15 2019, @02:05PM
Microsoft Azure is #2 in the cloud business for a simple reason. They offer Windows hosting. One of the few vendors who do. And, Microsoft has begun changing the licensing (sorry I don't remember a link) so that other "windows hosting" cloud providers are at a significant price disadvantage.
If you had a Windows workload to host in the cloud, honestly, what vendor would you go to?
Microsoft is #2 here because they offer something that few others provide.
When trying to solve a problem don't ask who suffers from the problem, ask who profits from the problem.