Microsoft Corporation (MSFT) CEO: Entry Cost For Cloud Domain Is $5 Billion Per Year


CNBC’s Jon Fortt talked to Microsoft Corporation (NASDAQ:MSFT)’s CEO Satya Nadella about his vision about Cloud platform. Nadella was very clear about his goals when he became CEO of Microsoft. Nadella believes that future belongs to the Cloud, Enterprise and mobile. Fortt showed some of the excerpts from Microsoft Corporation (NASDAQ:MSFT)’s CEO interview. Nadella thinks that there is a plethora of barriers in the Cloud domain. If a company is not already spending $4-$5 billion in Cloud domain each year, there is a scarce chance that it can make an effect in the market.

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Nadella said that not all the companies are at the level of spending that amount of cash in the Cloud domain. If a company is eyeing for a mega-scale Cloud player, the cost and capital demanded for this is hefty. Microsoft Corporation (NASDAQ:MSFT)’s CEO said that there are around three main players in the Cloud domain. He mentioned Google and Amazon apart from Microsoft.

Nadella claimed that Microsoft is the only public Cloud Company from North America that operates inside China. There are two offices of Microsoft Corporation (NASDAQ:MSFT) in China and the company has a clear edge to cease the emerging markets by sitting in China. Other companies are facing extreme barriers during business and expansion inside Chinese markets. Microsoft Corporation (NASDAQ:MSFT) provides, as Nadella claimed, a complete infrastructure for any multi-national company which is looking to operate inside China because of its access to the Chinese public sector.

Fortt commented about Nadella’s claims and said that the price to enter Cloud domain is pretty big. It will take around $1 billion each quarter for any company to be a leading Cloud player. It is interesting to note that Microsoft Corporation (NASDAQ:MSFT)’s CEO didn’t count IBM while mentioning Cloud companies.

Jeffrey Ubben‘s ValueAct Capital owns over 74 million shares in Microsoft Corporation (NASDAQ:MSFT).

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