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- Microsoft Cloud Strenght and AI investment 🤖, Activist interest in Salesforce 🧑‍🏫, Google vs. ChatGPT 🔎
Microsoft Cloud Strenght and AI investment 🤖, Activist interest in Salesforce 🧑‍🏫, Google vs. ChatGPT 🔎
And also: Cloud Service Spending Down in Asia, Amazon and Stripe's new Partnership.
Kristoffer Lindström
January 26, 2023
Microsoft announced strong second-quarter results driven by their cloud offerings, including Azure and other cloud services. Revenue for Intelligent Cloud increased 18% (24% in constant currency), with server products and cloud services increased 20% (up 26% in constant currency) wich was driven by the rise of Azure and other cloud service revenue growth of 31% (38% in constant currency)
CEO Satya Nadella stated that the company is committed to helping customers innovate in the new era of AI.
Microsoft recently held an earnings webcast which included a Q&A session with CEO Satya Nadella and other executives. During the webcast, Nadella discussed various topics, including stability in Office 365 Commercial revenue numbers, growth across all workloads, and customer adoption of E5 health. He also discussed Microsoft’s investments in other per-user workloads, such as Viva and Power Platform. Regarding Azure customer ramps, Nadella noted that large customers are looking to optimize their current workloads and use the money saved for new projects. He also mentioned that every app will be an AI app in the future, and that Microsoft had added more long-term customer commitments to Azure last quarter.
As previously rumored, Microsoft Corp. is investing $10 billion in OpenAI, whose artificial intelligence tool ChatGPT has taken the internet by storm since its introduction in November.
The massive investment comes as Microsoft competes with Alphabet Inc., Amazon.com Inc. and Meta Platforms Inc. to dominate the quickly evolving AI technology that generates text, images, and other media when prompted.
The new support builds upon Microsoft's previous investments of $1 billion in 2019 and 2021 and is aimed at giving them access to some of the most advanced AI systems available. With this move, Microsoft hopes to join the race for powering up workplace performance through AI.
Salesforce, one of the world's leading tech giants, is facing pressure from Elliott Management Corporation, an activist investor. Elliott has a track record of pushing for change and board representation at other tech companies such as Citrix, Commvault, and Western Digital.
Salesforce recently announced a 10 percent cut to its workforce due to the economic downturn. With Elliot's investment in Salesforce, it could mean further job losses or potentially selling off some of their recent multi-billion dollar acquisitions. CEO Marc Benioff's determined, independent approach could potentially spark discord with external investors due to his lack of openness to counsel. It remains unclear what changes Elliott will demand but it is certain that whatever follows will have an impact on the future of Salesforce.
The potential of OpenAI's language-generating chatbot, ChatGPT, to replace Google search has been the subject of much speculation in recent months. In their 2021 paper, the Google researchers suggested an ideal chatbot search assistant would be authoritative, transparent, unbiased, accessible and contain diverse perspectives — all criteria that ChatGPT still struggles to meet. Furthermore, copyright lawsuits filed this week against OpenAI raise further questions about the technology's implementation in search. While competitive pressures may push companies like Google and Microsoft to use generative AI for search implementations soon, OpenAI CEO Sam Altman cautions that such changes will likely not be as dramatic as some think. At the end of the day, Google still has the upper hand in this race to revolutionize search.
Therefore, it's safe to say that despite CutGPT's impressive capabilities, there is still a long way to go before it can replace Google search.
Spending on cloud services in Asia Pacific was down in the fourth quarter, dragged by a troubled tech sector in China, according to an ISG report.
This was attributed to a particular weakness in infrastructure-as-a-service (IaaS) spending due to lockdowns and technology regulations in China that impacted the country's large hyper-scale providers.
If you exclude China, Asia Pacific's combined market ACV for the quarter would have been up 10% over the prior year,” said ISG Asia pacific partner and regional leader Scott Bertsch.
Full-year results Asia Pacific's combined market generated ACV of US $13.8 billion, down by 21% versus 2021, the steepest decline since ISG began measuring the combined market in 2015.
Southeast Asia, the region's second-largest market, produced US$795 million of managed services ACV for the year, up by 74%, and finished 2022 at US$344 million of ACV in the fourth quarter up by 46%over the prior year.
Amazon.com Inc. plans to broaden its use of Stripe Inc.'s payment processing platform significantly as part of an expanded partnership that the companies announced today.
In the tech sector, Stripe’s user base includes not only Amazon but also Google LLC, Salesforce Inc., and other major industry players.
Stripe reportedly generated revenues of $2.5 billion in 2021 and is believed to be valued at $74 billion.
“Stripe has been a trusted partner, helping accelerate our business at every turn," said Max Bardon, vice president of payments at Amazon. "
That isolated environment, or Enclave, doesn't accept inbound network connections and automatically blocks unauthorized code from running.
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