What’s keeping Microsoft Corporation (NASDAQ:MSFT)’s sales managers and salespeople awake at night these days?
According to Business Insider, that may be “consumption”. More specifically, “consumption” as it relates to cloud computing or how much cloud a customer really uses.
“The scariest new word on the lips of Microsoft’s sales managers these days is ‘consumption,’ multiple sources have told Business Insider,” the publication said.
According to their sources, some customers of the software giant have rights to use Microsoft Corporation (NASDAQ:MSFT)’s cloud services as part of contracts that also include rights to use other software but some of these customers do not use the cloud services they have rights to.
As a result, Microsoft Corporation (NASDAQ:MSFT) is reportedly pressuring its sales teams to get customers to use the cloud services they have. “Consumption” metrics is apparently a very key set of metrics for sales teams now at the software giant.
Because of this, some people have quit, the publication notes, while some have been told that their bonuses may be cut which matters a lot to salespeople as they earn their true income through bonuses.
As part of contracts the company is negotiating with customers, it’s essentially charging for Azure, its cloud services bundle, but applying discounts for other software like Windows licenses. However, if people don’t really use Azure, that revenue stream is threatened the next time the Enterprise Agreement is negotiated since the business may opt to not get Azure.
This presents a problem for Microsoft Corporation (NASDAQ:MSFT) as it is keen on showing the world, its investors and the Street, that its cloud usage is growing and generating money for the company.
Nonetheless, it should be noted that Business Insider quotes some sources it has saying that the problem is not widespread. However, it also noted that in some areas, fewer than 20% of enterprise customers account for over 90% of Azure usage.
Boykin Curry’s Eagle Capital Management ended 2014 with about 32.13 million Microsoft Corporation (NASDAQ:MSFT) shares.
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