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What Microsoft's New Love for Linux Says about Open-Source Tech

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Part 5
What Microsoft's New Love for Linux Says about Open-Source Tech PART 5 OF 10

How Microsoft Is Targeting Higher Growth in the Cloud

Microsoft is banking on SQL Server

So far in the series, we’ve discussed how Microsoft’s (MSFT) recent announcement of enabling SQL Server on Linux will expand the reach of the company’s offerings. Microsoft’s new SQL Server boasts exclusive cloud facilities that will help clients to organize their hybrid cloud architectures, leading to quick and cost-efficient results.

IBM (IBM) leads the hybrid cloud space, while Amazon (AMZN) leads the overall cloud space. Salesforce.com (CRM) dominates the PaaS (Platform-as-a-Service) and SaaS (Software-as-a-Service) spaces.

How Microsoft Is Targeting Higher Growth in the Cloud

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Scott Guthrie, Microsoft’s executive vice president, Cloud and Enterprise Group, stated, “SQL Server on Linux will provide customers with even more flexibility in their data solution. One with mission-critical performance, industry-leading TCO, best-in-class security, and hybrid cloud innovations – like Stretch Database which lets customers access their data on-premises and in the cloud whenever they want at low cost – all built in.”

Cloud and Server products contribute the maximum toward Microsoft’s overall revenues

We’ve discussed how Microsoft is expanding its avenues to move away from Windows. Windows, which was once the company’s core offering, now barely contributes 10% toward its overall revenue. On the other hand, cloud services and server and enterprise software contribute the most.

Microsoft’s Azure revenues rose 140% in fiscal 2Q16, whereas its Azure premium services approximately tripled on a year-over-year basis. In fiscal 2Q16, Microsoft stated that its Office 365 revenues rose by approximately 70%, with its subscriber base rising by 20.6 million subscribers.

You may want to consider investing in the iShares Russell 1000 Growth ETF (IWF) to gain exposure to Microsoft. IWF has ~13% exposure to application software and invests ~2.4% of its holdings in Microsoft.

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