Microsoft's Brilliant Move To Make Money From Arch Rival Google
It's as if Microsoft said, "Ok, Google, we'll share our customers with you."
The program goes by the name of the Microsoft License Mobility. It basically says that if a Microsoft customer has a support contract, the customer can move certain Windows apps to a cloud with no extra cost.
The software covered includes things like Microsoft's email server, Exchange; Microsoft's database, SQL Server; its videoconferencing and instant messaging server, Lync; its security software, Forefront; and a couple other things. It does not include the full Microsoft Office suite.
This License Mobility program is used to encourage Microsoft customers to try Microsoft's own cloud, Azure. But under CEO Satya Nadella, Microsoft has a new mantra: getting people to use Microsoft software any way they want.
And some of them might want to use it in Google's cloud.
Cloud computing, the ability to run software in someone else's data center accessed over the Internet, is turning the $3.7 trillion enterprise tech industry on its head. Companies don't want to buy and run tons of software and hardware when they can rent it all instead.
There's a heated battle on between traditional enterprise vendors (Microsoft, IBM, SAP) and up-and-comers (Amazon, Google, Salesforce.com), to grab those customers.
Recently, Gartner rated Microsoft as a close second to leader Amazon in the cloud market. But Microsoft COO Kevin Turner said that Microsoft really views Google as its biggest competitor in cloud, and market leader Amazon as half a big a threat.
If you think about Microsoft Azure and Windows Server and the opportunity we have there, the way I like to think about this is you really have about 2.5 companies in all of technology from a multinational standpoint that have hyper scale cloud. Google certainly has a hyper scale cloud and I count Amazon as a half. And the reason I count them as a half is they're not completely global at this point and they don't have the functionality and redundancy.
So you would think that Microsoft would run away from sharing its customers with Google in this way - or any way.
Which is exactly why this is brilliant. Microsoft customers can use Google's cloud, but they still have to buy Microsoft software the old-fashioned (and expensive) way, by licensing it, in addition to the fees they pay Google to rent Google's software.
Meanwhile, Google gets another foothold into that multi-trillion enterprise IT market.
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