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Microsoft Plans Up To 3,000 Job Cuts In a Sales Staff Overhaul To Fuel Cloud Growth (cnbc.com)
Microsoft announced a major reorganization on Wednesday that will include thousands of layoffs, largely in sales. From a report: The job cuts amount to less that 10 percent of the company's total sales force, and about 75 percent of them will be outside the U.S., the company said. Reports from last week suggested this was going to happen, and that Microsoft was going to specifically focus on how it sells its cloud services product, Azure. Microsoft's cloud business has been booming over recent quarters -- Microsoft noted Azure sales growth of 93 percent last quarter. While Amazon has become a bigger competitor in the space, Microsoft's restructuring is to pivot to software as a service, platform as a service and infrastructure.
This is all in sales, not technology. Being in a systems engineering/design role, I often get pulled in on meetings where the software and hardware sales guys are courting the CIOs and other executives. It's amazing how much money someone can make selling stuff like enterprise agreements, and equally amazing how much money they have to spend to get the CIOs to sign the paper. Expensive dinners, rounds of golf, sports tickets, you name it -- I've never tagged along on the strip club visits some CIOs I've worked with have demanded from their salespeople.
I'm guessing Microsoft is getting rid of all the salespeople who are narrowly focused on closing these big licensing deals and trying to refocus everyone on selling Azure and subscriptions. That's the grand master plan -- get out of the boxed software business and force everyone to rent computing power and software tools from them, IBM mainframe style. It's an absolute license to print money -- all they need to do is provide power, cooling, network and hardware. We're doing a huge Azure-based project now and it's really interesting -- but it's eye-wateringly expensive when you think about the long term. The long term lock-in is what they're going for -- rather than buying a Windows Server license for $20K once, you pay over and over and over, just like companies do for Office 365.
I just wish they'd slow down a little bit and let people catch up -- there are new features every week, major changes to existing ones very frequently and now Azure Stack is almost released. I think at some point they're going to have to slow it down just to nail down problems once things get to a certain size. (God help them the day someone figures out how to compromise Azure AD in an undetectable way.)