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Microsoft exec: 'Cloud a half-trillion dollar biz by 2020'

From tentative trend to full-bore juggernaut

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Convergence 2012 The uptake of cloud services is accelerating faster than initially thought, and could be a half a trillion dollar business by the end of the decade, Microsoft chief operating officer Kevin Turner told attendees of the Convergence 2012 conference in Houston, Texas, on Monday.

Turner talked up Microsoft's cloud, Windows Azure, during his opening keynote at Convergence, which this year attracted 10,000 users and partners involved in Microsoft's Dynamics ERP and CRM solutions. The COO noted a recent prediction from industry analyst Forrester, which foresaw the cloud business growing from a $40 billion business today to become a $240 billion industry by 2020.

"We actually think that number is light, maybe even by [a factor of] two, at the speed that we're seeing the cloud take hold," Turner said. "A year ago, [cloud] was sort of talked about as a trend. Now it's in full mainstream. We're seeing tens of millions of customers go to the cloud in very, very rapid ways."

To that end, Microsoft announced timelines for moving two of its ERP solutions onto the Azure cloud. Cloud versions of Microsoft Dynamics NAV 2013 and Microsoft Dynamics GP 2013 that are targeted at small- and medium-sized businesses will be available when these products ship in the fourth quarter.

Bigger companies seeking a Microsoft cloud ERP system will want to wait for the next major version of Microsoft Dynamics AX, the vendor said. Microsoft shipped AX 2012 last September, and is on track to ship Microsoft Dynamics AX 2012 R2 during the fourth quarter. AX 2012 R2 will bring multi-channel capabilities for retailers, and new business intelligence features based on the upcoming release of SQL Server 2012; it is not expected to run on the Azure cloud.

Dynamics CRM, which is already running on Azure, will get new "cloud-based data enrichment" capabilities with the upcoming Q2 service update slated for Q4. This release will also bring social customer-care updates, Microsoft said.

"Without a doubt," Turner crowed, "the deepest, broadest, and most enterprise-ready cloud solutions on the planet are the Microsoft solutions. We really doubled-down as an organization, starting with the database, moving to infrastructure, connectivity, and business applications. Being able to bring a cloud story across the Microsoft portfolio is one of the things that we're most proud of today."

Another thing that Turner was excited about was the range of choice that Microsoft can offer to customers. Whether customers are looking to build their own private cloud, access services from a public cloud run by Microsoft or one of its partners, or run a hybrid mix of the two, Microsoft has a solution for them, he said – provided they are already fully authorized and versed in running two particular Microsoft products.

"We're building a cloud where you decide where and how you want to go to the cloud," he said. "As long as you have Active Directory completely deployed, and System Center completely deployed, you can really leverage the common technologies that we have across identify, virtualization, management, and development, and no other company can provide that to you in the cloud."

At the end of his presentation, Turner took a swipe at Oracle, one of Microsoft's rivals in the enterprise software market. "When I came to the company almost seven years ago now, one of the things we had installed at our company was this sort of black box that no one liked called Siebel," he said. "There just are no happy Siebel customers in the world. That's just a true story."

Microsoft has always tried to eat its own cooking when it comes to the ERP and CRM systems that run its own business. In the 1980s and 1990s, its manufacturing business ran a "black box" AS/400-based MRP system, which was eventually transitioned to Microsoft's own ERP systems when it was ready in the late 1990s. Getting off its competitor's CRM was a source of pride for Microsoft. "We got a standing ovation when from the salesforce when we were able to deliver and finish that product," Turner said. ®

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