Today’s Wall Street Journal had a short Dow Jones Newswire piece entitled "Microsoft Exec: Customers Embracing "Cloud Computing". The lead-in:
“Corporate customers are switching to "cloud"-based technology more rapidly than Microsoft Corp. (MSFT) expected, a senior executive at the company said Monday.
"People are embracing cloud computing faster than we anticipated," Stephen Elop, who heads Microsoft’s business division – which includes the ubiquitous Office tools – said in an interview.”
The interesting thing though, was the article went on to suggest that Microsoft finds itself chasing Google, and that is what drove Microsoft’s recent price reductions:
“Redmond, Wash.-based Microsoft is ramping up competition, offering hosted versions of familiar services like email and Office for its corporate customers. Last week, it cut the price of its Exchange Online email services. The move was seen as in part a reaction to some accounts Google has won recently, such as a contract to run 30,000 email accounts for employees of the City of Los Angeles.”
This of course, Microsoft denied, and attributed the price reduction to economies of scale:
“Elop said wider take-up of services like hosted email had prompted Microsoft to introduce the price cuts, because Microsoft was increasingly able to offer such services at large scale without impacting profitability. He said Microsoft was confident it could offer such services profitably on an ongoing basis. Some analysts have expressed concern that the need to compete with rivals could lower margins.”
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Why is interesting? The early leaders in cloud computing, both in innovation and offering adoption, are not traditional Enterprise and Agency IT Vendors. Rather, they are a search company and a bookseller. And neither is going away.
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