As Microsoft’s new fiscal year kicked off in July, Amy Hood, Microsoft’s Chief Financial Officer, shared the company’s changes to its cloud services offering. The servers that allow Microsoft customers to take advantage of Azure, the tech giant’s cloud platform, will see their lifespan increase from four to six years. This extension is a double-edged sword, because if the American company expects savings, it may worry its customers and processor manufacturers.
A news that does not please component manufacturers
When announcing the results of the previous quarter, Amy Hood emphasized the benefits of these changes. According to her, the investments made by the company have increased the efficiency of Microsoft’s cloud servers, which today makes it possible to increase their lifespan by two years. Thus, the financial director estimates that the results of the company will be marked by an increase of 3.7 billion dollars at the end of the fiscal year 2023.
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The company does not go into the concrete details of the improvements to its cloud infrastructures, but the changes involve prolonged use of the components present in the servers. A news that does not please AMD, Intel and Ampere, the historical suppliers of Microsoft. Increasing the lifespan of servers means decreasing the frequency of purchasing new components.
This is all the more worrying for Microsoft customers, as they will have to rely on an aging infrastructure. In six years, manufacturers will probably have already produced three new generations of processors, specifies The Register. Other innovations in terms of improving network infrastructures will also take place during this period.
Microsoft follows the competition
The competition announced this same type of extension in early 2022. Google now offers servers for four years and those from Amazon Web Services (AWS) have a five-year lifespan. Businesses may be tempted to switch cloud providers if Microsoft’s new proposal threatens to affect them.
Even though AWS remains the world leader in cloud-related services with 33% market share in the first quarter of 2022, Microsoft also maintains a strong position at 22%. Quarter-over-quarter, cloud has helped boost the company’s bottom line, with Azure revenue growing 46% year-over-year in Q1 2022. Behind this change is possible to lend the company intentions of sustainable development, but the customers especially hope for a reduction in the cost of the service.