Microsoft bares heart of green to lure conservationist cloud customers

Satya Nadella-led Microsoft is invoking conservationism in an effort to lure more customers to its cloud business at a time when it is locked in a battle of supremacy with rivals Amazon Web Services and internet giant Google.

According to a Bloomberg report, the tech giant has said that it runs four popular applications in its cloud data centres that help the company reduce energy usage, in a sharp contrast to high power consumption of enterprises that run their own data centres.

The report further said that Microsoft had tested its Azure computing and storage services, along with Exchange email and SharePoint collaboration software, to check the reduction in energy usage. The company said that the test results varied, with smaller systems in companies showing energy savings from 22 to 93%. 

According to the report, the Nadella-led firm has been buying renewable energy to run its data centres to reduce energy usage, with the help of AI-driven chips that drive traffic to different servers, depending on workload.

The report also cited Brad Smith, president and chief legal officer, Microsoft, as saying that usage of renewable energy in running servers can make a difference at the global level. He said that customers can benefit from using Microsoft servers as it is cheaper than using their own data centres on premises.

The report said that Microsoft itself has imposed carbon tax restrictions within its own departments. Smith said that the tax imposed on the different departments generates close to $30 million a year to invest in efficiency. “It gets people to focus,” Smith was quoted as saying about the tax. “Suddenly, they see a line item in the budget, a cost, and they want to reduce that amount of money,” he said.

In February, Microsoft showed that its hybrid cloud strategy was paying off as it topped Jeff Bezos-led Amazon’s cloud services arm in revenue for the quarter ended December and through 2017.

Amazon Web Services (AWS) garnered $5.11 billion in revenue for its fiscal fourth quarter ended December 2017 and $17.46 billion for the entire 2017. Microsoft reported revenue of $5.3 billion for the October-December period, its fiscal second quarter, taking the company’s total revenue for 2017 to $18.6 billion.

Microsoft follows a July-June financial year while Amazon follows the January-December format.

Also, Microsoft showed a growth of 56% in the quarter, higher than Amazon’s 45%. The boost in Microsoft’s cloud revenue can be linked to the huge 98% growth in revenue from its cloud computing arm Azure. Its revenue from Dynamics 365 product line grew 67% while Office 365 Commercial revenue rose 41%.

Interestingly, tech giant IBM has declared that its cloud revenue for the quarter ended December stood at $5.5 billion, topping that of both Microsoft and Amazon. However, its revenue for 2017 was $17 billion, lower than that of the two rivals. Another major cloud services player, Google, is yet to disclose its commercial cloud revenue numbers.