Microsoft Corporation (NASDAQ:MSFT) is soaring in the clouds, all thanks to its Azure cloud computing division as the firm posted better than expected earnings. The Richmond firm reported that revenue from Azure soared 93% in the fiscal second quarter to push an 8% growth in the firm’s cloud business $6.9B. Microsoft competes with Amazon’s AWS and Google’s GCP in the cloud business where AWS has a 45% market share.
However, Microsoft’s seems to be recording the fastest growth the cloud business with its revenue almost doubling. The firm regained its innovative drive to stop being an ancient firm making desktop software and computer operating systems to become a powerful player in cloud computing. This piece seeks to explore of one the major reasons behind the firm’s success run in the cloud computing business.
Microsoft’s Azure is another bright spot for investors
One of the main factors driving Microsoft’(NASDAQ:MSFT)‘s growth in the cloud business is the fact that automakers are using its cloud as the brain behind their self-driving technologies. Ford, Toyota, and BMW among others are using Azure to develop their driver assist, media, and predictive maintenance systems. Azure especially makes it much easier for automakers to use machine learning to develop the driver safety system of their cars.
The car is no longer a mechanical device to take people from Point A to Point B. The auto industry is seeing a massive disruption across all strata. One of the biggest disruptions right now is the move to transition from burning fossil fuels to cleaner energy through EVs – Tesla is leading that push. The second disruptive force is the move to build smart cars that could make cars more rational than humans.
Interestingly, many automakers think it is smarter to piggyback on a third party cloud computing firm such as Amazon or Microsoft instead of building a cloud system from scratch. Judson Althoff, executive vice president of Microsoft’s worldwide commercial business in an interview with CNBC says, “the car is like a rolling computer, capturing all kinds of data… All that data is coming back to Azure, where we apply machine learning and artificial intelligence to help auto manufacturers make cars better and safer.”
Automakers are driving Microsoft’s growth in business
Microsoft (NASDAQ:MSFT) is enjoying bullish tailwinds because automakers are using Azure to build connected cars. The patronage from automakers is however justified because the Richmond firm has heavy investments in data centers and advanced machine-learning technologies. Earlier this year, the firm unveiled the Microsoft Connected Vehicle Platform to power services for connected cars.
The firm notes that automakers such as Nissan and BMW, who are using Azure are only leveraging its cloud to build their own systems. The firm noted in a statement that its platform” is not an in-car operating system or a ‘finished product;’ it’s a living, agile platform that starts with the cloud as the foundation and aims to address five core scenarios that our partners have told us are key priorities.”