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@CloudExpo Authors: Zakia Bouachraoui, Yeshim Deniz, Pat Romanski, Elizabeth White, Liz McMillan

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The Business of Cloud Computing: Ozzie on Cloud Margins

“The margins on services are not like the margins on software," says Microsoft’s chief architect

Microsoft’s chief architect Ray Ozzie has figured out that cloud margins aren’t gonna be the same as the margins derived from on-premises software. “The margins on services are not like the margins on software so [cloud computing] will increase our profit and it will increase our revenue, but you won’t have that margin,” he’s quoted as saying at the Churchill Club last week.

“The margins at the low level, at the Azure level, are going to be lower than the top level, where you’re delivering a solution or something like Exchange. You’re pricing that solution around a business value more than cost so the margins are still very, very good.”

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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