Office 365 Growth Opportunity 'a Lot Bigger Than Anything We've Achieved', Microsoft CEO Satya Nadella Says (cnbc.com)

Microsoft CEO Satya Nadella on Monday suggested that Microsoft could grow more from its Office 365 line of cloud productivity apps than anything in the company's 43-year history. From a report: With business editions of Office 365, Microsoft faces competition from Google, as well as younger players like Box and Dropbox, in the race to get companies collaborating in apps running on remote cloud servers. "The growth opportunity for what is Office 365 is a lot bigger than anything we've achieved, even with our high penetration in the client-server world," Nadella said at the Morgan Stanley Technology Media and Telecom conference in San Francisco. When companies transition from Microsoft's traditional licensing business to cloud-based subscriptions, it's "not a one-for-one move," Nadella told Morgan Stanley analyst Keith Weiss at the event. Microsoft recently introduced the Microsoft 365 bundle, which includes Office as well as Windows, along with enterprise security and mobility services. Nadella also talked up the company's potential in the Azure public cloud infrastructure business, where it competes with Google as well as Amazon Web Services. "We had a good business in our server business, but this business is orders of magnitude bigger than what used to be a successful server business," he said.

Comments

Yeah no shit.

[o_ferguson]

Subscription model is user abuse. Well done.

Re:Yeah no shit.

[bondsbw]

Disagree. There's nothing inherently "abusive" about a subscription model.

If your TCO is higher and you don't care for the cloud service benefits or any of the other perks, then say that. It's a different issue.

Re:Yeah no shit.

[wardrich86]

cloud service benefits

I'm still trying to figure out the benefits of storing your data on multiple servers that you have no control over, and no idea where exactly they are. When you delete a file from the cloud, is it actually properly deleted? If the cloud is attacked, how long will it take for the parent company to admit they were hacked? I like the concept of cloud storage, but I have 0 trust or faith in that system at all.

Re:Yeah no shit.

[subanark]

Let's see here.

Benefits: Your data is managed by experts whose main focus is keeping everyone's data secure, available and reliable. Multiple servers ensure redundancy and if needed globally available to allow for minimal latency.

"you have no control over", "is [a file] actually properly deleted"
Is this any different than trusting your local IT professional? What would be the fallout it if your AWS, Azure, Google, ect... was found to not treat a customers data in a secure and private way (please don't use a counter example from a middle tier service like iCloud, one drive, or google drive)?

"If the cloud is attacked, how long will it take for the parent company to admit they were hacked?"
A lot sooner, now that the EU is putting GDPR into place.

-- A personal opinion from your friendly Azure engineer

Re:Yeah no shit.

[OneHundredAndTen]

I laugh every time I hear about the "cord cutters" bragging about how they're saving money. HBO, Netflix, Disney, Hulu, UFC...the content fracturing is endless, and soon the aggregated monthly cost to access all the shit you want to watch will be twice as much as cable ever was.

As you say, only if you want to watch all that shit. One can lead a perfectly fulfilled, complete life without accessing all that shit, as you appropriately call it. And save for other undertakings.

Re:Yeah no shit.

[dave562]

We are starting to use Azure. We have an E5 license for ~5000 seats of Office 365, including OneDrive and Skype for Business. Given all of that, I am a bit biased. Also for full disclosure, we are building out a hybrid cloud with Azure to augment our four data centers (2 in the US, 1 in the UK, 1 in Dubai). I have also been doing IT for 20 years, so I have seen some trends come and go.

This whole FUD about "don't trust the cloud with your data" is getting REALLY old. Microsoft (and AWS) have more redundancy and security built into their infrastructure that you could ever hope to build into a private setup. I say this as someone who is managing close to 4 PB of data being remote replicated via SRDF (for our EMC gear) and array based replication (for the Pure stuff).

By the end of next year, we will have moved the majority of our remote office file server data into OneDrive and MS Teams. We are going to be able to save huge amounts of money by not having to buy Data Domain hardware to replicate back to our core data centers, and we are going to get better reliability, versioning and recovery options.

I trust Microsoft's security team of hundreds of engineers, analysts and support staff more than I trust the half dozen guys in house. And I say this as someone who has been interested in, and responsible for computer security since the mid-90s. There is no way that a small SOC at a mid-sized corporation can hold a candle to a 24x7 global operation like Microsoft (or Amazon). It just is not going to happen.

While we still run a lot of our applications in house, we are using Azure for development and proof of concept work. When you look at the costs of enterprise class storage with all of the compliance boxes checked (at rest encryption, remote replication, etc.) there is no way that we can provide storage in a cost competitive way to the business.

Our clients are slowly coming around to trusting the cloud as well. We work with heavy regulated industries including financial services and healthcare. We have a lot of sensitive data on our networks. But as our clients shift their own workloads to the cloud (I hate that term), they are becoming more permissive of allowing us to move the data that we host for them there as well.

I think that in 10 years from now, the only companies that are going to still be hosting their own infrastructure are going to be big banks, tech and manufacturing firms that are still building things and need strict controls over their IP. Other than that, the costs of paying other people to run infrastructure for you are just too compelling. There is no way to stay competitive with that.

Re:Yeah no shit.

[painandgreed]

cloud service benefits

I'm still trying to figure out the benefits of storing your data on multiple servers that you have no control over, and no idea where exactly they are. When you delete a file from the cloud, is it actually properly deleted? If the cloud is attacked, how long will it take for the parent company to admit they were hacked? I like the concept of cloud storage, but I have 0 trust or faith in that system at all.

It's not like the CxO or even any random director knows the answers to those questions even if their own IT are running things. However with an organization like Microsoft, there are SLAs, Business Agreements, HIPAA agreements, and all sorts of contracts that spell out exactly what happens if something goes wrong. With their own IT, they get a shrug and "It'll be fixed when it's fixed". One of the reasons MS has probably been doing so well is that in our experience, they are willing to sign those agreements, particularly the HIPAA ones, not only agreeing to follow all federal guidelines but our interpretation of them as spelled out in the contract we give them. So, with those contracts in place, a demonstrable savings in operational costs, they have about as much trust and any other business they deal with.

Re:Yeah no shit.

[Darinbob]

No, I'm not buying every single channel I used to get with satellite. No one ever watched all channels they could receive. It does save money to cut the cord, lots of it. Even if I got all of HBO, netflix, amazon, and hulu, it's still half the cost of satellite (which in turn is much cheaper than cable). People aren't cutting the cord because it's the cool thing to do, but because they realize they're paying for an expensive service and they're not getting their money's worth, it's an economic decision.

Microsoft is pushing the subscription model becuase they've seen the writing on the wall that users are not upgrading as regularly as they like which cuts into profits. Why users are going with this model, I have no idea. It's very clearly a trap, but there are a lot of enterprise customers who are in a romantic relationship with Microsoft.

Re:Yeah no shit.

[tzanger]

Cable only makes sense for people who have kids.

Nonsense. Cable is the worst thing for kids. A constant stream of commercials demanding their attention, a thousand channels of shit. My three (14, 9, 5) only ever see commercials when they're at a friend's house and the interruption drives them nuts. Netflix has a good selection of kid's content and between plex and what we rent from appletv... the rest is covered.

Cable TV is an abomination and needs to die.

Re:Yeah no shit.

[TheRaven64]

The danger of the cloud is that it's a single point of failure and a high-value target. Your 12 guys may not be the most competent in the world, but that doesn't matter unless your data are the most valuable in the world. Someone attacking Azure might not be attacking you, but if they happen to get your data at the same time then selling it is just bonus money for them. Similarly, people are more likely to try to DDoS Azure or AWS than they are your in-house server.

Meltdown allowed you to dump the contents of memory of other VMs on the same nodes as you (including those in Azure Secure Cloud SGX enclaves, if you have access to the preview of that). Microsoft has now rolled out some mitigations, but the vulnerability existed from before the creation of Azure until recently. Anything in multi-tenant systems in that window may have been compromised. What's your plan for preventing that in the future and for dealing with it if it's happened?

We will rake you over hotter coals than ever b4!

[Anonymous Coward]

This is truly an excellent opportunity to make money off of charging people a monthly fee for what used to be a fairly affordable one-time purchase. Sad that the big thing Microsoft is pumped about is a stale word processor and spreadsheet package. Satya's idea of innovation is a payment plan almost nobody actually likes.

Insert MICROS~1 advert on the Microsoft slashdot

[najajomo]

'When companies transition from Microsoft's traditional licensing business to cloud-based subscriptions, it's "not a one-for-one move"'

Instead of paying the once for the software, you'll be paying a yearly rent into perpetuity. Does anyone here remember when this was a technology forum?

I use LibreOffice

[Maxo-Texas]

I used open office for several years and it closed on functionality.

Then there was the kerfuffle and I switched over to LibreOffice.

I have a legit full license to Microsoft office 2012. I never use it.

Re: I use LibreOffice

[peragrin]

During the libre open office kerfuffle I just stopped using an to be ok f them. I didn't use them at home often enough to deal with in the the updates.

Switched to Google docs and sheets. Covers all of my needs and best yet I can work on stuff like bill paying during lunch at work.

MS office does have some useful features I use at work (index match in arrays) but for home that just isn't needed.

Translation to plain english:

[140Mandak262Jamuna]

What he said:

When companies transition from Microsoft's traditional licensing business to cloud-based subscriptions, it's "not a one-for-one move," Nadella told Morgan Stanley analyst Keith Weiss

What is means: We were foolish to have sold perpetual licenses for just a one time hit. People who can move out have already moved out of MsOffice. Those who have not moved out, could not so. So we have them by their balls. We are going to make them all pay month after month to get access to their own data. Dont worry about users holding on to their old licenses. We make life hell for them, and they will eventually succumb and move to cloud and pay us our due share, our daily bread. It might be their data, but they stored it in our formats. Now they are our prisoners, we will never release them, but continue to bleed them dry.

Re:Translation to plain english:

[b0s0z0ku]

You can still save locally without cloud-fucking your documents, even if you pay monthly. OneDrive is easy to disable.

Re: Translation to plain english:

[140Mandak262Jamuna]

Open? You mean the OOXML abomination? With binary blobs that can not be parsed by anything other than the old MS office functions? MsOffice has an emulator in which old code is executed to parse these blobs. They have still not provided a reference implementation of their own standard. And their own standard is, "feed this to the old ms office binary, what ever it spits out is the standard behavior"

Really? Because....

[Zorro]

Mine has been trying to connect for the last 30 minutes without success. This happens often everyday.

Re:Fuck you,Satya.

[Anonymous Coward]

This... has nothing to do with LibreOffice. O365 is an entire set of enterprise IT management and productivity tools. This would be like you telling Home Depot they're worthless because someone gave you a hammer for free.

Re:Insert MICROS~1 advert on the Microsoft slashdo

[Anonymous Coward]

We used to be engineers during the early days of Slashdot. We have all now been promoted to the management.

Re:We will rake you over hotter coals than ever b4

[guruevi]

Affordable? MS Office for businesses was $700-1200/user depending on your licensing model and often you didn't even get CAL's for your Exchange and other servers, even the home edition was like $100-200. Even if you had 10,000 licenses or more, you still were on the hook for ~$2-3M/year for Microsoft licensing.

Re:We will rake you over hotter coals than ever b4

[Alain Williams]

Sad that the big thing Microsoft is pumped about is a stale word processor and spreadsheet package.

Satya will fix that when he has enough users running cloud software with any component that resides on a PC being frequently updated. Release a whole bunch of ''improvements'' that just happen to require a change to the file format - things that really matter ... thus making problems for Libreoffice. 6 months later once Libreoffice has caught up; do it again; then again. Eventually most people will give up with Libreoffice. Yes: the EU will sue Microsoft and say that its file formats must be documented, but in a fast moving environment the competition will never quite get the opportunity to catch up.

Re:Fuck you,Satya.

[alvinrod]

Yeah, but why buy the cow when you can get the hammer for free?

Re:We will rake you over hotter coals than ever b4

[tlhIngan]

This is truly an excellent opportunity to make money off of charging people a monthly fee for what used to be a fairly affordable one-time purchase. Sad that the big thing Microsoft is pumped about is a stale word processor and spreadsheet package. Satya's idea of innovation is a payment plan almost nobody actually likes.

Obviously you never bought Office.

A year of O365 is around $100. A full blown standalone version of Office (yes, you can buy those, the cards actually are right where the O365 cards are - look carefully and you'll find them) is around $3-400.

If you're a student, it's around $80 and you get a pile of more benefits, namely the $80 gives you 4 years of O365.

And the Office you get from O365 is good on 5 PCs (and 5 "other devices"), while the standalone Office is good for one PC only.

Yes, the Office is the same - you download the same software and can use it offline. Though the O365 version comes with cloud storage, which for 99% of home users out there, is essential as it'll be backed up automatically.

So yes, they do make O365 quite attractive - especially for home. You get the latest version of Office, you can run it on 5 separate PCs and given there's a new version every few years, it costs around the same.

And like I said, you can still buy the standalone version if you want. Just don't try to install it on more than 1 PC at a time.

We've had nothing but problems with o365 migration

[MindPrison]

...at one of the biggest companies in the world.

I'm an IT supporter there, and we're currently drowning in migration issues from the old system to o365. Profiles messing up, shared mails not working properly, license issues prohibiting our users from reading the mails and thus working. Literally thousands of calls, hundreds just at my department every day about Outlook o365 migration issues.

Get it working before you brag!

Re:We've had nothing but problems with o365 migrat

[greenwow]

We migrated to Office 365 last week. Most people still can't read email despite the fact we hired someone Microsoft recommended to help. The company is named SkyKick, and their office is near us here in Seattle. They were nice enough to send someone to our office to try to help, but I don't think they've been able to get anyone working yet. They seem sharp, but the migration has been a disaster.

Re:We've had nothing but problems with o365 migrat

[dave562]

What is your problem with O365? We moved ~5000 global users out of Exchange and into Exchange Online over a year ago at this point and it works great. We have a pretty complex Active Directory forest, with multiple domains.

Sounds like you guys borked your transition. The technology itself is solid. Way better than managing the Exchange infrastructure ourselves.

We did a phased rollout over the course of 18 months.

Re:We've had nothing but problems with o365 migrat

[dave562]

Not only is it unlikely that he works for one of the biggest companies in the world, even if he does, they are blowing it big time.

We are only a mid-sized enterprise with ~5000 licenses from Microsoft. They have a whole squad of employees dedicated to our account. We have dedicated engineers and support escalation matrixes for the major technologies that we use (Skype for Business, O365 / Exchange and Azure). Anything I need a resource for, I can just email our account rep and he gets me connected with someone who actually knows what they are talking about. If we open a support ticket and are not happy with engineer assigned to it, we contact our support rep and she starts rattling cages.

When we did our O365 / Exchange migration, we had weekly meetings with Microsoft engineers and account reps to make sure that things were going well. It was all included "for free" as part of our enterprise agreement. I do not know how MS treats other clients, but they want us to succeed. Maybe it is the markets we are in, or the clients we work with, but they really treat us like a showcase for their technology. We have also been in a couple of Azure "Preview" programs for various technologies (mostly around backup and SQL), and their product managers are extremely receptive to feedback and product enhancement ideas.

Re:Insert MICROS~1 advert on the Microsoft slashdo

[jezwel]

Instead of having to manage the status of 10's of thousands of PCs (ordered, in transit, deployed, in hotswap pools, in storage awaiting disposal, disposed) I now check the O365 portal for the number of users with O365 licences.

What used to take several days (normally) to several months (when under audit) is now literally a few minutes work at any time.
It is significantly easier to justify costs to the CFO when it comes to budget time - $X/user times number of users.

You bet I like an annual user subscription cost with automated federated user management to O365 portal. When you're already paying for an enterprise agreement, the cost increase to change to subscription models vs the reduced compliance effort is a no brainer.

Why TV ? Go out in the sun ?

[DrYak]

I laugh every time I hear about the "cord cutters" bragging about how they're saving money. HBO, Netflix, Disney, Hulu, UFC...the content fracturing is endless, and soon the aggregated monthly cost to access all the shit you want to watch will be twice as much as cable ever was.

Or, you know, you could realize that the "glowing box with moving pictures on it that dumbs you down" isn't an absolute requirement to fill your life.
Watching series or movies, no matter where from (/HBO, Netflix, whatever) isn't the only form of entertainment available to humanity.

You could also go out more and do some outdoor activity.
Yes, I know, /. and basement dwellers.
But doing some outdoor exercise could be also good for your general health, extend a bit your life expectancy and even more increase your quality of life.
(And there are a lot of simple out-door activities that costs a lot less than a gym/fitness membership, and certainly a lot less than any TV-media combination).

Yes, some people are replacing cable TV with an almost cable-TV-like situation, where the only advantage is to be less at the mercy of a single local monopolies, but a few competing companies with differing content.
But other people just wax their skis and go to have fun on the snow in the Alps.

(DISCLAIMER: I live on the European side of the Atlantic pond, where cable didn't have such a huge success as in the US, and where there's even a significant choice of totally free TV/Radio media - either off-the-air (DVB-T), or (in bigger cities) relayed un-encrypted for free on you appartment's cable antenna connection port, even if you don't subscribe to any cable company at all.
We aren't as much cable cutter as we didn't have that many cables to cut to begin with).