HEATHER BELLINI:Thank you, everybody.Thank you for coming today.I really want to thank the Microsoft team for
coming, because, for those of you who may not be watching the weather in
Seattle, they've gotten hit with a ton of snow over the last week, and I know
this was a Herculean effort to get here.
I want to thank Julia White for coming, she's the Corporate Vice President of
Azure Marketing.She's been with us before.It's always a great session.We really appreciate you taking the time to
guess the thing we get asked a lot is just kind of, where are we in the
transition?If you go back to two years
ago, five years ago, people would have thought by now, 100 percent of workloads,
everyone's always more optimistic, would be in public cloud.And depending on what stats you look at,
we're far from that.But the market has
been growing very aggressively.
do you think about where we are in the transition?
JULIA WHITE:Yeah.There's a couple of different angles on it.I would say while, in general, the cloud
option is great and it's definitely growing and we're moving into even late
stage adopters, the percentage of the IT and the applications being built and
migrated going to cloud is still pretty small.We still have a lot more to go.So while most companies today have some workloads or they're migrating
to the cloud or building new in the cloud, it's still not the majority of what
I do think a couple of things have changed.We definitely have moved from seeing kind of the mid-tier and early
adopters moving into cloud and getting kind of the first workloads into the
cloud into even the very late stage adopters.So I think we've still made kind of a cycle of a customer type.We've definitely pushed even farther, and
interestingly in the past year we've had some conversations, some really basic
cloud conversations all over again, because this next wave of adopters has
started to come in on that front.
HEATHER BELLINI:Right.So when you think about workloads on Azure, what moved there first and I
guess you have to think of it by cohort, like you just mentioned.So the early adopters, what are they putting
in Azure today that they wanted a few years ago, and do you see the uptake of
the technology, kind of the migration, changing now that people have been able
to learn from the cohorts before them?
JULIA WHITE:There's the type of adopter.But then I think the overall TAM for Azure
and public cloud is two things.One is
applications that exist today that can migrate to the cloud or net-new
applications being built.So you have
migration and then we have innovation, two basic ways to look at it.
if you go back, the early, early cloud adopters was innovation, net-new
things.They didn't have a lot.And actually some of the early Azure
workloads that came, a new mobile app, a new system being built.And then you move into the wave of like
actually I get it, cloud, I'm really going to start migrating my existing stuff,
my mission critical, my business area.And I'd say if you went back three years the migration workloads looked
like backup, disaster recovery, non-mission critical line of business systems.
the migration pipe is as good as the innovation pipe, we've kind of normalized
on that because of the types of workloads, and then within the migration you're
seeing things like SAP, huge pipeline, mission critical systems running on
Azure.Microsoft is running our own SAP
system on Azure as a proof point.So we
definitely moved out of kind of lower tier, tier two, type of workloads under
migration in terms of the tier ones.So
I think on both fronts the balance between innovation kind of workloads and
applications and migrations has normalized, which tells you things are kind of
shaping to the whole market.
then the level of sophistication of what's migrated has also increased.But you know it's still early.
HEATHER BELLINI:I don't know to the extent you guys kind of
talk about this, but if you can give us a way to think about, you were just
kind of going down this path, but like IaaS versus PaaS penetration in
Azure?So meaning of Azure workloads
what percentage of them or revenue how much would be PaaS versus IaaS?How do you think about that moving higher up?
JULIA WHITE:The way I think about it and I would
encourage others to think about it is, think about it by the workload or
application customers are using.And if
it's just a straight migration, you're going to use core infrastructure.
then even a couple of years ago people would just say, I'm just going to
migrate and then leave it alone.I don't
actually meet a customer who talks like that anymore.Walmart is a great example, they started just
migrating and then they're like, we don't do that anymore, we modernize
everything that we're bringing over because we see the efficiencies we get.
when you say "modernization" what does that mean?It means I'm using more than just
things like your developer services, your data services, managed services to
get the greater efficiencies of the cloud as well as you're now taking
advantage of what we talked about as cloud-native services that were built from
the beginning to have this incredible scale, super-efficient, great user
I would say from the overall pipeline, we have a lot of people just migrating
in infrastructure, but then almost immediately after that the modernization
work happens.And that's when these
platform services and data services start getting consumed.
HEATHER BELLINI:So you've been involved in this business for
quite some time, if you take a look at kind of the marketing message that you
would help the team create, when you're looking at your competitors and kind of
going through the pros and cons or the competitive differentiation, what does
it look like today?How do you feel your
competing and what are the strengths and weaknesses that you talk about?
JULIA WHITE:I think that we'd talk about but also we hear
back from our customers, because then it would just be us talking about, first
I would say hybrid has been for a long time a huge differentiator and our
belief that compute will be distributed, not just all in public clouds, it will
be distributed on premises as well, and that's true in what we talk about as
hybrid with data center and cloud, but even as we know eventually more of the
intelligent edge and more distributed compute.And so building consistency around that area, so we can certainly talk
more about that.
then the next one would be, overall, we talk about productivity, and this is
again a point of view that we came -- we, because of our heritage, know that
customers have a varied range of technology skillsets and technology
teams.And so we built in the management
tools, built in the developer tools, built in policy such that as people were
moving to the cloud, they didn't have to learn all this tooling again.It's just built in so all the systems are
there.So the productivity message
the last one is actually really increasingly around trust, and that's trust of
our security, our compliance, our privacy.We have more accreditations and attestations than the other public
clouds, certainly important, but it's even father now to trusted vendor and
that we're very transparent about what our core competencies are, what
businesses we're in.We're not going to
turn around and compete with our customers.And that's obviously a big thing that we hear about from the market as
well in terms of overall trusting Microsoft as a partner.
HEATHER BELLINI:And Amy has talked a lot on the earnings
calls about enterprise mobility being included obviously in the Azure line and
just the strength of that business.And
we kind of think of that as maybe more of a SaaS application running on top of
that.How do you think about the other
types of SaaS applications and the reason why we care about it is because it
has higher gross margins, so how do we think about kind of the how you can
expand those other touchpoints within Azure, SaaS touchpoints within Azure?
JULIA WHITE:So enterprise mobility, or EMS, is a set of
Azure services that we then sell as more of a per user kind of stat, it's to
protect the user on their device and their apps.And so kind of that package that really
actually goes to market with our Microsoft 365, so it's a great opportunity
other areas, honestly, all of our data services really fall in that class of
kind of higher-level services.And that
part of the Azure business is incredibly healthy.So we see a ton of opportunity in that class
of services, and again it's about customers moving to the cloud and one of the
biggest problems they're trying to solve is around their data estate with
operational data but also analytical data, particularly everyone has an AI
strategy, everybody.And what they do, I've
got to use AI, I've got to create AI in all my applications and my
systems.And then I get all these dreams
about AI.And then they go look and
they're like, I have no data.My
analytic systems are old and rigid.
HEATHER BELLINI:How to do AI without the data.
JULIA WHITE:And so quickly they pivot to, oh, gosh, we've
got to work on our analytics, our data warehousing, our data lake.And so that part of our cloud growth is
phenomenal because if you're going to go build AI, you're not going to build a
data estate and analytics system on premises.It just doesn't make sense.That
part is, I think from the more higher-level services --
HEATHER BELLINI:We probably don't hear as much about that one
on the earnings calls, but it would seem like that would be one that's on the
comm then in terms of what we should be -- a little less EMS maybe just given
how well you guys have done there and more in this area.
JULIA WHITE:Yeah.I mean if you think about the overall growth, EMS we're at 94 million
paid users.It's a huge business,
phenomenal.We love it.But it does at some point slow at that
scale.Where the data services and other
areas of Azure we're still putting up triple-digit numbers on really big
HEATHER BELLINI:Right.And that's the other question that comes up a lot, I'm interested from
your perspective, the investors, the consternation every quarter about whether
Azure growth is 74 or 76.A lot of
market cap trades on very small difference in percentages.
JULIA WHITE:I know.Amy reminds me about that all the time.
HEATHER BELLINI:I'm sure she does.
do you say to people who fixate on that specific number?
JULIA WHITE:It is an important number.So it's not a bad one to pay attention to.
JULIA WHITE:But you have to keep it in perspective.I mean Azure is a massive business.And the way we report is also inclusive of
the EMS part of the business, as well, so in the per user that will have a
graduating growth aspect to it, as well.And then if you unpack behind that number, there is incredible growth
within it.I'm thinking about the data
service is like a triple digit growth and those are huge, huge new industries
that we're going into.
yeah, a business of our size you're going to see growth moderate.And I always feel bad in internal
reviews.We have very high
expectations.Amy has very high
expectations.And I take beatings for
these businesses that are multimillion-dollar businesses and they're only
growing at 100 percent.And I'm like,
god, where does this happen.When I went
to business school no one told me how to grow a multimillion-dollar business at
100 percent.Here we are. So we're the dynamics of it.
feel good about a couple of things.One,
the new businesses we're entering into, whether it be analytics, you're going
to see over the next quarter additional places we're investing in and new
businesses we're crashing into.I mean
we've effectively got an unlimited TAM that we're playing with for the majority
of Azure.EMS has a per-user cap to it,
but from an IaaS and PaaS perspective very unlimited.It's more about operationalizing it well,
capitalizing on it well.So, yeah,
you'll see the growth continue to stabilize, but in really high numbers.
HEATHER BELLINI:How do you do internal benchmarking on your
Azure performance, like how do you know, like how do you determine, how do you
make Amy happy?Are there certain
benchmarks you look at?Is it AWS'
growth rate?How are you kind of grading
yourself on that segment?
JULIA WHITE:Yeah, obviously it's the triangulation of a
few different areas.Certainly looking
at what other vendors have been growing and rates at the same point in time for
their lifecycle is certainly one way to look at it.Looking at what the size and shape of the existing
on-premises equivalencies would be, and then how fast is that moving.And then we see just early signals in terms
of if AI is going to be true then this type of data doc needs to be happening
and so working back from what we see from a market signal perspective.
JULIA WHITE:So I'd say looking at those three.It's a little bit of an art, obviously, when
we're talking about an unlimited TAM type of business.But we do -- every time we think we put up
aggressive numbers Amy kind of pushes us a little harder, which is her
job.And we'll keep trying to do it.
HEATHER BELLINI:So one question that started to come up over
the last few months was there was this I guess idea that sales people were
getting paid to pre-sell capacity, so getting paid quota to pre-sell
capacity.And this might not be kind of
your area of expertise, but just kind of how do you think about how the go to
market has changed and we're always told that the process of getting paid
pre-usage, right, changed a few years ago and now it was more like, look, the
sales people are focused on consumption.How do we -- what can you share with us about kind of how the go to
market has changed and potentially how compensation strategies have changed?
JULIA WHITE:Yeah, it was a three-year journey where we
took our sales force from being paid on build revenue, so selling Microsoft 365
licenses or Azure commits to being purely paid on consumption, kind of
graduated each of the years.We are 100
percent based on consumption now.So,
any Microsoft sales person who is paid on Azure, it's about consumed revenue.
if a customer chooses to say, hey, I want to give you a million dollars up
front and I'll use it over the next year, that sales person doesn't see a
million dollars on their quota.They see
it as it gets consumed through the year.So 100 percent true on that.The
company will still recognize if a customer chooses to bill up front.And it's interesting, we had polled and done
so much field retraining to get out of this build motion, get rid of that
muscle memory and go to consumption.And
then actually customers were like, no, no, I actually kind of like to buy and
lock up my dollars.So if there's
actually a customer, of course we'll take their money that way.But that's not how the sales people on the
front lines are actually being recognized.And that's not how we also incentivize or compensate our partner channel
either, on consumed revenue.
HEATHER BELLINI:Okay.And I wanted to spend a little bit of time on Azure Hybrid Benefits,
which seems like you guys are uniquely positioned to offer this bring your own
license movement.Can you talk to us
about when this really started to make its way into the market and what the
feedback has been?When did you start to
see customers have that moment where they said, okay, this is great?
JULIA WHITE:Yeah, so this is for context.We have Azure Hybrid Benefits.So if you're a Windows Server or a SQL Server
customer you can, if you have Software Assurance, Hybrid Benefits allows you to
basically run your Windows Server, SQL Server in Azure and you don't have to
repurchase the IP when you do that.So
it's a fantastic advantage for -- it kind of gives the on-premises customers
and the buyers of Windows and SQL a kind of insurance plan, because most people
know they want to go to the cloud in the next generation.And then I'll basically give Azure a
wonderful price advantage in terms of being able to run it with the same IP
that you've already bought.
HEATHER BELLINI:And when did that go into effect?
JULIA WHITE:I was going to say, I think we're now in our
second year officially of when that program landed.But it took off in a couple, mostly about 18,
12 months ago.We really saw adoption
crank up.There's just awareness, people
buying it.And then also we
operationalize it in the product itself.So when you're in Azure you go to deploy a virtual machine that says,
hey, you have Azure Hybrid Benefits, so it also just made it really
frictionless for our customers to take advantage of that.But we're seeing a huge benefit in both our
on-premises licenses, because of the benefit it adds to those customers, but
also our pipeline of Windows and SQL applications migrating to Azure is fantastic.
the other aspect of this, too, we have the Azure Hybrid Benefits.But we also have our Windows and SQL Server
2008 product that's going into extended support.It's 10 years old.That means it's going out of mainstream
support.So, customers are faced with
two options.One, they can buy extended
security updates for about 75 percent of the cost of a license, or they can
move and run it on Azure and get that for free.So it's a secondary benefit for the 2008 install base, which is the
largest install base we have.
HEATHER BELLINI:Right and is that -- do they have to pay that
per year if they stay -- saying they want to do it on-premise and paying the
JULIA WHITE:It's 75 percent of the license for three
HEATHER BELLINI:For three years and after that you have to do
JULIA WHITE:Then you get some agreement after that,
yeah.It's not a pretty road.And in general, it's a good -- it's just a
good catalyst.It's not actually that
different than what's happening on SAP, where everyone on SAP has to move to
HANA by 2025.That is a huge catalyst of
people saying, okay, I've got to touch my SAP system.Am I going to move to HANA, am I moving to
the cloud?Again, we see phenomenal
pipeline around SAP systems moving to Azure I think with that catalyst.And the 2008 extended support, end of support
and security updates is another one of those, so two big growth opportunities
for the business.
HEATHER BELLINI:And how do you feel -- like we didn't talk
specifically about AWS before, but how do you feel you've closed the
functionality gap relative to them over the years, or do you not think about it
JULIA WHITE:I'd say what's reflected in the customer and
partner conversations it's for the most part now people say we're equal, the
analysts, the customers.And the interesting
thing is most customers I go to it's like, oh, you're missing this feature, but
I know you're going to have it soon enough, or AWS is missing that feature, but
they'll probably get it, too.So it's
pretty normalized from a pure technology perspective.
places that are materially different that come up, hybrid, that category
thing.We have a bunch of stuff they
can't touch, so a few aspects like that.But otherwise it's pretty normalized from that perspective.And then it's more into AWS obviously they
were out first.They're a leader.They get the benefit of that doubt.When I was leading the Office 365 business, I
had that luxury.So I know what it's
like where we have to hunt a little harder on the Azure side.
I see the trust factor comes up a lot and I think that it's one of those
intangibles.But if you partner, in a
partner meeting I had this morning, where like I used to work with AWS, but now
I don't.I worry they're competing with
me.That's just a very real concern. I'm
proud of the work we've done to be very transparent about our plans, our core
competency, what we're doing, what we're not doing such that we've had 40 years
of having to build trust, we know what that looks like.
HEATHER BELLINI:So there used to be a good bit of Windows
revenue, or Windows workloads running on AWS.Should that -- like, what happens to those going forward?I mean that was before maybe you became as
strong as you guys are.What's the trend
in Windows workloads running on AWS and do you find -- is there a way for you
to kind of shift those workloads back to Azure?
JULIA WHITE:I don't have their numbers obviously.I can see mine and the pipeline --
HEATHER BELLINI:They must send you a check, right?
JULIA WHITE:Yeah, but there are certain boundaries.
HEATHER BELLINI:Amy knows best.
JULIA WHITE:But I would say that I would be shocked if
their pipeline to Windows SQL is better than ours, despite them being bigger,
obviously, I think we have phenomenal growth and we have just very, very
differentiated opportunities on that front.
applications off of a cloud to another one, honestly, it's a place where we
could spend a lot of time and our competitive nature would want us to, but I'm
like the white space in the TAM of this business is so big I don't actually
encourage our sales people to focus a lot of energy on that.But customers like, hey, I can't trust AWS,
or I can find better efficiencies than you, we'll see a switch.But it's not necessarily the place I'm
actively hunting down and trying to go pull off of it.
I mean the other aspect between us and AWS is it's a multi-cloud world and I
think we've expected that.If you look
at on-premises today it's very heterogeneous and I don't think the cloud will
be any different.And I see people
making different decisions around, hey, I'm going to do new innovation this
cloud and I'm going to do a migration on this cloud.
really the customer's mindset for the most part is department or application by
application.And so they can do best of
breed, they can want to kind of spread their estates across different vendors
for vendor control, vendor lock-in concerns, a lot of different things.So even though a customer might have a
Windows SQL application on AWS, that doesn't mean they're not going to put
their next one on Azure and it will be blended.I expect that to continue to be true.
HEATHER BELLINI:What is your take on AWS Outposts?
JULIA WHITE:It's heartening.It was funny to watch, they wouldn't even say
the word hybrid.They would literally
not say the word.And we were like,
that's so weird.But I guess if you only
have a cloud, if you only have a hammer everything is a nail.And we've been talking about hybrid for five
years.We've had Azure Stack in market
for over two years and they finally uttered the word hybrid and now it's
Outposts.And I even laugh a little bit
at the name like Outposts, like you're not serious about it.It's some like you're having to do.The way they named it even tells you how they
really feel about it.
I think it's interesting.It's not Azure
Stack.People are now trying to
compare.First of all, it's not in
market.I think it's a year out.It's definitely different than what Azure
Stack is, which is a full kind of integrated cloud system that you can run
locally.This, from what I can see,
looks like they are kind of platform layer services built to run on existing
infrastructure in kind of a managed way.We'll see how that turns out.
think it's kind of like welcome to reality.Customers are hybrid.They'll
need hybrid.We just need to see how
they play on that.And, again, it's
different to try and do it after the fact, to have a hybrid offering, versus
built from the beginning.We have
identity, we have data, we have management, all hybrid.
HEATHER BELLINI:I want to see if there's any questions in the
think there's a mic runner.Hold on,
he'll be right there.
QUESTION:I think there's a perception that you guys
are very strong in large scale enterprises, like you've talked about hybrid,
your reliability, your long-scale trust.How are you positioning yourself with the other companies, with startups,
so that you're relevant for that next generation of companies?
JULIA WHITE:Yeah, if you look at, for instance, a
segmentation perspective, if you look at the Azure business we're actually very
equally distributed across small business, mid-size enterprise and large
enterprise from a consumed revenue perspective.So it's maybe more balanced than people might think.We obviously are very strong in enterprise,
but overall, very, very healthy in small business, as well.So we feel great about that, feel great about
the vision and the growth rates and actually seeing really strong in our SMB
kind of our web direct business, super strong.
to your question on startups, we have a couple of different initiative, very targeted
at startups and we have reactors and kind of co-innovation centers around the
world.We also have investment programs
where we provide to startups not just money, but resources.And then actually the thing that most
startups are interested in working with us on is we do go to market with them.
if you come and you work with us and you have your technology running on Azure,
then you earn your right to be able to be co-sold by our sales force, which is
a huge lever for a startup.And so you
obviously earn your way to that level, but the idea that you could be suddenly
sold by 50,000 Microsoft sales people across the globe is pretty
impressive.So we're seeing strong
demand from that specifically.
you go back a couple of years ago, us, AWS, GC were all throwing out a bunch of
credits to startups and I think mostly burning money.They would just move from one program to the
next program and use credits and then leave.Where now we have a much more focused value add, a two-way value add
program with startups specifically.So
feel good about our pipeline there.And
obviously if it's a B-to-B startup, they love us.If you're B-to-C you don't have quite as much,
just because our global sales force isn't necessarily focused on that.But that's okay.
HEATHER BELLINI:Any other questions?
one back there.
QUESTION:Hi, I had a bit of a pickup whenever they
would talk about the fact that Microsoft offers solutions and they don't
compete with customers.When Heather
asked that you essentially said you don't go chase these kinds of
customers.Am I missing something here?
JULIA WHITE:I didn't hear that very well, so one more
QUESTION:I guess what I'm trying to ask is I detected
a pickup in the tone from management recently about Microsoft not competing
with their customers, whereas you said that you don't really chase customers,
per se, which Amazon may be competing with?
JULIA WHITE:I'll tell you what I'm seeing and see if that
answers your question, perhaps.I would
say things like retailers and financial services companies now and now into
healthcare seeing Amazon go into those businesses and saying, gosh, am I going
to give money to people who are now competing with me, and more than money
actually the deeper issue is data.As
you're running your systems on a cloud, they have a sense of the data, where
information is coming from.It's
information you probably don't want to share with someone who is competing in
your same space.
I think that's the thing that I see come up most often and why you're seeing
like Kroger and Walgreens and Gap and lots of companies now moving actively to
Azure to distance themselves from basically feeding the competition.So I don't know if that answers your
QUESTION:You mentioned some of the difficulties of
converting an AI strategy into reality.I'm wondering are you seeing that in any of your AI compute offerings
that actually everyone wanted to say that they were going to use all of this
and actually the reality isn't quite as strong as you thought?
JULIA WHITE:Yeah, as in lots of other technologies, a
hype cycle.And then so everyone got
very excited about AI and they're still excited.If I look at our executive briefing center,
AI is the number one conversation customers want to come have with us which
just tells you the index on that.
as people say, great, I want to do AI.There are two things in AI.There
are models, AI models that have been prebuilt.We prebuild them with all the data and resources we have.So like computer vision, we can detect that
this is a shoe versus a water bottle.And you can just use that AI model in your application and you don't
have to do a lot.We've seen a lot of
adoption of those prebuilt models, right, because if I'm building an application,
I can just take advantage of that AI model.
there's the more sophisticated, which is I'm going to go build my own AI models
to power my supply chain or to predict customer behavior, and that's where you
need to get into data scientists who are going to be using very specialized
compute to be able to process and run those kinds of algorithms in high
fidelity.And that's a much more
complicated conversation and it tends to start with they dream of doing it, but
they don't have the data scientists.They don't quite know what they want to do yet.So that tends to be much more about analytics,
getting the data science basics, and then taking advantage of the compute that
we have available for it.
there's kind of two classes.There's the
prebuilt AI models they can use and then building their own and the capability
QUESTION:And how do you plan your end of capacity that
and a wider question, how do you plan capacity for the such strong growth?
JULIA WHITE:There's a lot of science in that.So it is a combination of, first of all,
where globally we see the demand signal, and we obviously have lots and lots of
models around how to predict demand and where it's going to be coming rom. But
then we also do, we have very good visibility into our sales pipeline, both
from our direct field but also from our partners of the type of applications or
the type of workloads people are coming on.
SAP has a certain type of compute that we know we need, and we have a pretty
good sense of where it needs to be distributed.AI was one, because it's still early, that's a little harder to
predict.So that one we have probably
not perfect capacity utilization on that one just because it's so early.It's not a big part of our fleet either,
that's a kind of specialized compute.So
it's not like being wildly off makes a lot of difference in the margins, but
that one is a little bit harder.
HEATHER BELLINI:I wanted to ask about container adoption and
the interest in serverless.What are
customers saying to you about both of those?
JULIA WHITE:Yeah.So in the kind of higher-level services, basically my simple way is
there's two classes, there's data services and then there's the kind of
developer platform services.So
containers and serverless that we talk about is on more of the developer.
to the application on premises, they migrate, then once they migrate the very
first thing you do to modernize is move to containers.And like the world has chosen Kubernetes and
containerization and using this technology called Kubernetes to do it.If you go to a Kubernetes Conference they are
selling out.It is mainstream, average
companies.It's gone from being elite
tech to being everybody's choice.So
that is absolutely the next wave.It is
core to every modernization project I've seen.I expect it to continue to be how we're doing it internally.So I think that is a very real trend.
on serverless, there's a lot of confusion around what is serverless, what does
it mean?And people have started talking
about it as event-driven.Kind of this
thing of like, hey, an action happens, an outcome, you make another
action.And we look at serverless as
basically how PaaS works.So we talk
about serverless, we don't really say PaaS anymore.It's like anything that doesn't require you
to manage the compute and networking and storage underneath.And that all comes into play when you're
doing modernization or net-new innovation applications.And I think that's a strong trend on that
side of things.
HEATHER BELLINI:So does that become deflationary to an extent,
because we went to cloud four or five years ago.We were deploying PaaS and buying reserved
instances, for example, for periods that we might not be using it for.We wanted to make sure it was always
available.And if you move to serverless,
you only have to use it when you need it.
do you think about the deflationary aspect that it could cause on someone's
IaaS and PaaS infrastructure versus kind of how much it could ignite even more
spending, the additive, and create new use cases and new applications?
JULIA WHITE:Yeah, I think you would theoretically say,
gosh, it's going to be deflationary because everything is going to shift over
there and everyone is going to get super-efficient in how they use it.I don't see the reality moving quite like
that.And if you look at, if you
classify both data and developer services, and that the data services are
growing incredibly hot.And you shift to
the core infrastructure where they're running and kind of make it up in data
even if it's kind of more deflationary on the developer level.
HEATHER BELLINI:So on a collective basis it's net increase in
spending, it just depends on how you're allocating it.
JULIA WHITE:Yeah, I do think there was -- as we've gotten
more sophisticated in what serverless means and the technology, there are
different types of it.And things like
our event-driven, it's super-efficient from a customer perspective, very low
cost.Awesome.It's hard to run systems on event-driven
technology, really hard.Like if you
really know what you're doing and you build a brand-new app, you can totally
make it work with event-driven only, but there's not many people on the planet
that can do that or really want to.
JULIA WHITE:So the theoretically possible versus what I
think is actually going to happen looks a little differently, and it will be
much more of a balanced approach in how people use the technology.
HEATHER BELLINI:I saw him standing there, was there a question
here?No.Okay.I saw the mic runner.
had Thomas Kurian who is now CEO of Google Cloud here earlier this
morning.I was wondering when you're
doing a competitive analysis or when you're hearing feedback from customers,
how does GCP fit into the equation?
JULIA WHITE:Yeah, I'm more like outside in when I
see.I'd say almost every conversation,
customer, partner is AWS/Azure.I expect
that in every meeting and every discussion.I see GCP occasionally and they mostly show up, like I was just in
France, the conversation there of, they tend to come in -- again, I'm just
reflecting what I see more than anything else.
HEATHER BELLINI:How Microsoft views what customers are
JULIA WHITE:Yeah, or what I see, just the reality is,
they come in with -- in a different way maybe through the CMO from AdWords or
their G Suite, and then kind of buy the GCP usage from that.And so it's more of kind of a roundabout way
to get into those accounts and more by the business.And I think if you're early and trying to get
enterprise wins, you're going to go by the business.So that's more what I see come in.And it's not frequent, to be honest.It's geographies I see a few places.
HEATHER BELLINI:Last question I had was about GitHub and the
role that you see GitHub playing in expanding your developer audience.How do you think about GitHub and how it fits
JULIA WHITE:And that's more at a Microsoft level, right,
in terms of being an incredible developer resource.Tens of millions of developers, 100 million
repositories, and a wonderful open source ecosystem, and so in terms of
Microsoft and developer relevancy it's a wonderful asset.It will continue to be run independently like
you've seen us do with LinkedIn or Minecraft and still have very independent
capabilities and decision making and autonomy, which is really important.And we deeply understand and value that.
yet we also see this opportunity to help customers.So as an example, we put an offer together
that allows our enterprise customers to buy GitHub enterprise on Microsoft
licensing.And it was not a big
promotion. We just kind of put it out there.And we've just seen an incredible adoption of it.Customers are begging.GitHub's enterprise offering wasn't really
done in an enterprise way, the way Microsoft was.And so customers were hungry for that.And so we just did a great pretty simple
thing for them.It got easier like
crazy.Now I can do all this with one
where we see great customer benefit and a natural affinity, a wonderful
opportunity together.We're not going to
be heavy-handed or jamming Azure on them or anything.
HEATHER BELLINI:Great.Thank you, Julia.Appreciate it.
More events coming soon
June 3, 2020 10:20 AM - ET
Morgan Stanley Sustainable Futures Summit
Brian Janous, GM, Datacenter Energy & Sustainability