On the occasion of its financial results, the Redmond company announced its intention to extend the life of its servers and network equipment on Azure. The time frame will go from 4 to 6 years with the key to savings amounting to billions of dollars. Microsoft thus joins the competition which has already taken the plunge at the beginning of the year.
24 months, a time that can seem long or short depending on your point of view. It is in any case, the supplement granted by Microsoft to the life cycle of the servers feeding its Azure cloud. On the occasion of the firm’s financial results, the financial director, Amy Hood, told investors, “we are extending the life of the assets related to the servers and network equipment of our cloud infrastructure from 4 to 6 years”. To explain this extension, she says that “investments in our software have allowed us to increase the operating efficiency of this equipment and technological advances have increased their lifespan beyond that purely accounting”.
Beyond the sustainable development aspect, Microsoft also and above all sees a financial interest in it. The firm will indeed save billions of dollars each year. The group’s CFO expects this change to have a $3.7 billion impact on results in fiscal year 2023 with a profit of $1.1 billion in the first quarter. Not sure, however, that this is good news for manufacturers of servers and network equipment, as well as specialists in semiconductors such as Intel and AMD. The longer lifespan of cloud infrastructures means that some purchases will be postponed.
Follow the competition
Microsoft’s decision follows by a few months that already taken by Google Cloud and AWS in this area. In February 2022, Google announced the extension of its lifecycle for servers from three to four years. That same month, AWS detailed plans to run servers for five years and networking equipment for six years, a one-year increase for both systems. Microsoft’s plan therefore seems more ambitious with the additional 24 months.
Ultimately, it will be necessary to analyze the impact of such a decision on customers. By realizing substantial savings, cloud providers will be under pressure from customers asking for an impact of this windfall on their contract and the price of the service. They will also be able to think about their future needs, which may require more efficient and modern servers and network equipment. In two years, the technology evolves quickly, very quickly even…