Following some mixed results for the quarter, Microsoft CEO Satya Nadella remains overly optimistic about the future of the company as it pertains to the cloud, believing that seasonal-like waves of cloud spending will continue to lift the revenue sales for the company for several more quarters.
Microsoft may have had some black spots in its quarterly earnings report for its fiscal-Q4, but most of those marks came in hardware and Windows licensing while the company’s cloud led businesses continue to chomp down market share with health gains.
On the subsequent earnings call, Nadella laid out a bullish future for the upcoming quarters of revenue that he believes will be the end of “catch-up optimizations” and the start of a “new projects” period that reignites spending for cloud services.
The folks over at Acceleration Economy offer a great summation of Nadella’s talking points during the earnings call that paints Microsoft in the perfect position to capitalize on a second wave of cloud services spending.
That catch-up optimization is something that we will lap going into the next couple of quarters — I think it’ll come down — and we are seeing new projects starts, including traditional types of projects starts but also even cloud migrations, data applications and of course, obviously, the AI applications.
Nadell’s theory is predicated on the belief that cloud services spending hit a lull following the quick adoption leading up to and through much of the height of the pandemic, and while businesses are still transitioning to the cloud many have been optimizing that transition and not spending as much as they could for newer projects.
Moving into a new post-height pandemic future, Nadella sees a continued transition to the cloud as well as businesses who recently moved, beginning to start new projects that require additional cloud services spending as well as efforts to roll in artificially intelligent services.
Understandably, Microsoft is bullish on its strengths when speaking with investors but with the company’s investments in OpenAI and partnership with Meta to produce Llama 2, the company sits poised to benefit from the already blossoming of an AI-ification boom as well as Nadella’s predicted second wave cloud services spending if things pivot the way he thinks they might.