A Microsoft partner tell us there's an 'obscene' opportunity for Microsoft's cloud because of a very old version of its database
- An enormous number of Microsoft customers are still running an extremely old version of its database and the company will soon no longer provide them with security fixes and updates.
- A year ago, Microsoft made these holdouts a deal to that lets them move their database to its cloud Azure at a bargain price.
- A Microsoft partner tells us that this situation could be a boon for Microsoft, and its partners.
- Right now there's a mad land grab going on among the major cloud companies for database customers because the cloud that hosts the data has a chance to sell a lot of other cloud services, too.
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"Microsoft has an obscenely large number of devices still on Windows Server 2008 and SQL Server 2008, like 60% of their installed base," Todd Pekats told Business Insider.
Pekats is vice president of Cloud Computing and Services for a big Microsoft reseller partner, PCM, and he heard that statistic in a Microsoft-run briefing while attending the company's huge tech conference for partners in Las Vegas last week.
Windows Server 2008 is an old version of Microsoft Windows that runs on servers and SQL Server 2008 is an equally old version of Microsoft's database. It was a very popular database back in the day, back before enterprises were running madly to cloud computing.
Microsoft isn't talking much about this large number of its customers who are sitting on this really outdated technology, Pekats says. But HG Insights, a site that tracks technology products usage, says it knows of over 85,000 companies using SQL Server 2008.
This tech is so old that Microsoft officially ended support for SQL Server back in 2014. Back then, Microsoft gave its customers an option to pay for "extended support" for the database until this month, July, 2019. Extended support mainly involves security patches: fixing any bugs or security holes that hackers could use. (Extended support for the old version of Windows will last until January 2020.)
Last year, however, there were still enough customers clinging to their old databases that Microsoft made them a deal: move those old databases, just as they were, to Microsoft's cloud Azure and Microsoft will continue to send them security patches, for free, until January 2023 for Windows Server and until July 2022 for SQL Server.
A lot of businesses will need to replace the ancient database technology they're using
We don't know how many customers took Microsoft up on that offer but needless to say, there's still a lot of companies using an ancient database who will soon need to move into more modern technology because if they don't, they will be easy pickings for hackers.
And that means that Microsoft and its resellers are sitting on another enormous opportunity to 1) sell more of Microsoft's cloud services to its customers, 2) sell extra consulting services to those customers who will need their database apps re-written and 3) sell Microsoft's fancy new database options, like its hyperscale database (which competes with Oracle's autonomous database), Pekats tells Business Insider.
Microsoft bull Keith Weiss of Morgan Stanley believes that Microsoft's back-office software could become a dark horse driving growth in the months to come.
That's in part because all the big cloud computing vendors including Microsoft, Amazon Web Services and Google, are madly trying to get companies to buy their cloud databases. Amazon and Oracle are particularly duking it out.
The cloud vendors know the whatever cloud is hosting the customer's data's has a lot of opportunity to make more money from those customers. They can, for instance, sell analytics tools to find insights in the data. They can sell apps to secure, backup and restore the data. And they can sell custom apps that take the data and perform other tasks as well.
In response, Microsoft is madly pushing its internal sales force to sell Microsoft 365, Pekats says, giving sales folks incentives that makes it easier for them to hit their quotas and earn bonuses if they sell a lot of M365 contracts.
M365 is a bundle for businesses that includes licenses for Windows 10, Office 365 and some Azure cloud security software.
Add it all together and Microsoft is looking at an enormous chance to rapidly grow its cloud this year. Microsoft did not immediately respond to a request for comment.
Get the latest Microsoft stock price here.
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