Although I no longer hold the stock, I still find myself defending Microsoft Corporation (NASDAQ:MSFT) quite a bit. That in and of itself might seem like a problem — when a company of Microsoft’s stature needs so much validation. There’s still a lot of good in this company, however. This despite the fact that it seems the tech world — specifically Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) — has left Mr. Softy in the dust.
And now Microsoft is looking to make up the difference in the cloud. Will it be enough?
Will Microsoft remain a cloud underdog?
Although the popularity of mobile devices has allowed Apple and Google to steal Microsoft’s luster, this has not taken away from Microsoft’s dominance in enterprise and, in particular, Office and Windows. That 80% of the company’s revenue still comes from businesses proves how strong those franchises still are. Nevertheless, with the cloud getting bigger each year, Microsoft has come under considerable pressure.
In Azure, Microsoft Corporation (NASDAQ:MSFT) has not been asleep at the wheel. And despite what bears may think, the platform is better than adequate. But even though I’m willing to give Microsoft a “glass half-full” thesis in its efforts, I don’t think Azure is ready for primetime yet. There was a point, though, when I felt Azure would be a significant player, especially since the cloud market is still fairly short on development tools. Plus, I felt the company’s Office 365 solution would have presented a solid software-as-a-service, or SaaS, rival to salesforce.com, inc. (NYSE:CRM) and Oracle Corporation (NASDAQ:ORCL) . Today, I’m not so sure.
I say this even though Microsoft has recently launched Azure community portal, which invites a wide range of developers to create, thereby increasing a broader adoption of the service. Microsoft Corporation (NASDAQ:MSFT) also refreshed Azure with a Virtual Machine-centric platform similar to Amazon.com, Inc. (NASDAQ:AMZN)‘s Elastic Compute Cloud. Going after Amazon is a good strategy, but Azure is still limited in functionality when compared to Amazon’s Web Services, or AWS.
However, Microsoft does have an advantage over Amazon by having a much bigger footprint among businesses and enterprise. Plus, it certainly benefits Microsoft by coming up with a way to grow Azure and all that goes into building an ecosystem. The question, though, is to what extent will users embrace Azure. And can Azure offset any decline or narrow the gap in mobile weakness against Apple and Google?
However, there’s also Oracle and Salesforce to contend with. As enterprises continue to transition to more SaaS environments, can Azure measure up against these two giants? Microsoft Corporation (NASDAQ:MSFT) should be able to compete on price and seamless integration, given its strong lead with business customers. Hopefully, these customers won’t expect or insist that Microsoft be better. Microsoft will just need to be adequate.