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How Microsoft Is Targeting the Internet of Things Space

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May. 8 2018, Updated 6:31 a.m. ET

Microsoft’s Azure Sphere is powered by Linux

Previously in this series, we discussed Microsoft’s (MSFT) shift in focus from Windows to the cloud, AI (artificial intelligence), and Linux. In mid-April, at the RSA Conference, Microsoft announced Azure Sphere, a combination of chip design, cloud security service, and Linux kernel. Azure Sphere, with enhanced security features, is designed to secure billions of IoT (Internet of Things) devices around the world.

Microsoft chose Linux over Windows because no version of Windows can fit on microcontroller chips. Through Azure Sphere, Microsoft continues to target the chip business.

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First offering built exclusively on open-source software

Microsoft’s Azure Sphere is likely to appeal to customers who want an open-chip design so that they can connect the chip to security services on their servers or from other cloud players. Though Microsoft has had an association with Linux in the past, Azure Sphere chip is the first offering the company has built exclusively on Linux.

Microsoft is targeting the IoT space with Azure Sphere

Azure Sphere is likely to bolster Microsoft’s position in the IoT market, which is dominated by Amazon (AMZN) and other players. According to The Wall Street Journal, IHS Markit analyst Tom Hackenberg said that “the global market for microcontroller chips that can connect to the web—roughly one-eighth of the overall microcontroller-chip business—hit $2.2 billion last year.”

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