Former Microsoft executive Ben Slivka urged the corporation to get rid of Office and Windows. Spinning the Office and Windows development team into a separate company will help the American IT giant strengthen its already successful cloud business and avoid the mistakes of the past, according to the expert who led the work on late versions of MS-DOS and early versions of Windows and Internet Explorer.
Advice from the former
Microsoft should single out the development of the Windows operating system and the Office suite of office applications as an independent business, and focus on the further development of the cloud direction. This was stated in an interview with the American channel CNBC by a former top manager of the company. Ben Cream (Ben Slivka).
“It would probably be right to bet on the future in the cloud,” said Slivka, a former general manager of one of Microsoft’s areas.
As noted by CNBC, Microsoft’s cloud business has made significant strides in recent years – Azure is the main competitor to the leader in the public cloud market –
Former Microsoft executive Ben Slivka urged to crush Microsoft
At the end of the 2021 fiscal year, the revenue of the Microsoft Intelligent Cloud division reached $ 60.08 billion ($ 48.37 billion a year earlier), and the total revenue of the company exceeded the $ 168 billion mark. services Azure, which revenue increased by 51% year-on-year.
The success of the cloud business spurred investor interest, resulting in Microsoft shares up 51% in 2021. By comparison, the S&P 500 Index rose 27% over the same period.
Microsoft’s failure in the mobile business
According to Ben Slivka, who is a minority shareholder in Microsoft – according to CNBC, he owns 100 shares of the corporation, he would not like to see differences within the company interfere with the further growth of Azure. As an example, he cited Microsoft’s attempt to break into the mobile business, which cost it huge costs and turned out to be a defeat in the fight against Apple and Google.
“The people who were in charge of the Windows business put the developers of the mobile operating system in a rigid framework and severely limited their capabilities,” says Slivka. “They had this Start button and all that stuff. Microsoft has relaunched its mobile strategy three times. Ultimately, smartphone makers and developers just gave up. ”
In July 2015, Microsoft admitted that it was forced to write off assets acquired from Nokia in 2014 in the amount of $ 7.6 billion. The company said that the phone business has less bright prospects than they initially expected. By Q2 2016, Microsoft was finally disenchanted with Nokia. In May 2016, as CNews reported, she sold her smartphone business to HMD Global for only $ 350 million, although she bought it for 5.44 billion euros.
In January 2019, Microsoft announced the final end of support for the proprietary Windows 10 Mobile operating system, which has not gained popularity, at the end of the year and advised owners of devices running it to switch to smartphones with iOS or Android.
Few experts share Cream’s opinion. Windows and Office continue to lead the market and drive new customers to Azure cloud services, analysts say. According to a recent Gartner report, large businesses are choosing Microsoft’s cloud based on the trust they have built up over the years.
“The positive business reputation Microsoft has built over the years holds promise for a bright future for Azure in terms of profit,” says Wells Fargo analyst Michael Turrin (Michael Turrin).
At the same time, in his opinion, many investors would be interested in investing in a more efficient company focused on providing public cloud services.
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Also in November 2021, Turrin predicted that Azure would overtake AWS in cloud market share by 2028, and by the end of 2023 Microsoft’s market capitalization would reach $ 3 trillion, with Azure’s business valued at half that amount. As of January 12, 2022, Microsoft’s capitalization is about $ 2.365 trillion.
Dropping Windows and Office will negatively impact the company’s bottom line, CNBC notes. Thus, over a third of Microsoft’s total revenue for the third quarter of fiscal year 2021 comes from sales of Office and related cloud services (excluding Azure) and Windows.
Amazon also offered to split
Earlier in the media, the question of a possible division of Amazon was exaggerated, the lion’s share of the revenue of which comes from the cloud business – Amazon Web Services (AWS).
In particular, Tim Bray (Tim Bray), a former Amazon vice president who retired from the company in May 2020, called for a separation of the retail business from the cloud business. He also suggested that the company could resort to such measures as a preventive step amid the close attention of antitrust structures to IT giants in general and Amazon in particular. However, the top management of the Internet giant has repeatedly made it clear that they are not considering such a scenario.
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However, the then head of AWS Andy Jesse (And Jassy) announced in June 2020 that the company would comply with regulatory requirements and allow AWS to spin off Amazon if required. Although, in his opinion, there is no point in this now.
Who is Ben Cream
Benjamin (Ben) Cream, according to his personal website, joined Microsoft in 1985 when it employed about 800 people. He participated in the formation of a team that was engaged in the development of operating systems OS / 2, MS-DOS 6.0 and 6.2, Windows 95, etc.
Cream also gathered and headed the development team of the Internet Explorer browser, which in 1994-1996. worked on versions one through three.
In 1999 Ben left Microsoft and together with his wife Lisa (Lisa) focused on investment projects as a business angel. In total, the couple invested in 15 companies related to the fields of bio- and space technologies, computer hardware and software.
Cream also has entrepreneurial experience. So, in his own words, in 2006 he founded the EdTech startup Dreambox Learning, which in 2010 sold with a small profit Reed Hastings (Reed Hastings), head of Netflix.