Microsoft has been tackling a usage problem among its Azure customers. While Microsoft has had great success in selling its Azure products to enterprise customers, they have fought to get companies to actually use them. Leaked numbers and a report from Business Insider shed led on how Microsoft is assuaging Azure related issues.
Businesses may not be using the Azure premium services because some companies were given them at no extra cost. While the Azure services may have cost money they were sold as part of packages that made the final bill the same as if there were no Azure services included. Sources told Business Insider that to fix the problem Microsoft is “pressuring its salespeople not just to sell the cloud, but actually to get their clients to use it.” The risk of packaging Azure premium services with other parts of a sale is that some companies may not know anything, care, or want those premium services.
The risk was so high that Microsoft CEO Satya Nadella sent out a memo to push salespeople to promote use of Azure services. “I’m looking to the sales and marketing organizations to showcase our unique value propositions and drive customer usage first and foremost.” The push appears to be having success but the core problem is still getting customers to actually use a service. In the cloud first, mobile first world that Satya Nadella is ushering in, it’s not enough to sell products and services. Microsoft has to get customers to actually use them enough to justify paying for them.
The problem that Microsoft is facing with Azure is similar to the problems cable companies are running into, how do you get people to pay for everything when they only want a few select services. When you initially subscribe to cable you often get promotional deals such as free HBO for 90 days. The only problem is perhaps that if you don’t watch HBO you likely won’t pay for it after those 90 days are up.
Microsoft has essentially been giving out free trial period for services that some companies may not want or need. Because it doesn’t affect the bottom line there’s no reason to say “I don’t want free things” but when it comes to renewing the next year, they may not pay extra for something they never used.
The usage problem is worth tackling and Nadella’s focus on it is justified but it’s not all doom and gloom. Azure is still a successful service and the emphasis on usage seems to be creating a long term fix to potential problems. According to Business Insider “,in 2014, US consumption vastly improved. Out of just over $70 million collected in the US as Azure revenue on enterprise contracts, companies utilized $47 million. That means “consumption” last year climbed to 67%, according to our sources.” The long term success of cloud services relies on usage and it seems that Microsoft is aware of where to place its focus.