If a customer is using our online services, our Exchange-hosted services, and an application wants to work with contact management information, as an example, for an application that's a logical extension of Exchange, they'll be able to deploy that in a cloud service like Windows Azure and interoperate and work with the data with Exchange, and then simply sell that service to the customer without having to go through the process of talking about the infrastructure.... I mean, very literally, a customer that's operating with, say, Exchange-hosted services could very rapidly trial one of these applications, and begin to get it up and running, with virtually no cost to them. The issue of selling that and actually going through the deployment, all of those things go away.
COO Kevin Turner said in July that leading with cloud helps better position Microsoft to sell on-premise products. What did he mean by that?
Well, I think what he means is that by explaining the future and helping our customers to know where they're going in the future, they have confidence in what they're doing today. There's a path. No customer is going to cut over immediately to the cloud. That's impossible for any substantive customer to do. They may move their messaging system to the cloud, or they may move a given application to the cloud, but any large customer has hundreds, thousands of applications. The complexity of their environment is very high. But by helping our customers see where they can drive themselves into the future, where they can focus on their business advantage and not need to worry about these infrastructure components, it provides them with a level of security knowing what they're doing today can be brought forward. It's a good balance.
But what about the knock on Microsoft in the sense that you're not pure-play cloud? Some competitors can say: 'Hey, we're all cloud. We're fully committed.' This reflects the benefit that I was talking about a few minutes ago where Microsoft has 20 years of experience of working with our enterprise customers and providing them with the services and capabilities they need, and 15 years of experience writing consumer services. If we just had that consumer services experience, I mean if all we had was a hammer, everything would look like a nail to us, too.
But that's not the world our customers live in. Our customers live in a world that's very heterogeneous. There is no significant customer where everything they do is in the cloud today. The fact that we're able to meet the customers' needs with on-premises software, while providing them with these amazing new services that the cloud brings and allowing customers to move at their own speed is actually a huge advantage. It turns out all of our customers see that. Our engagements with customers about where they're going in the future, what they want to do as they roll out a new messaging collaboration service, they're very positive. And, in fact, we're winning the vast, vast majority of all those engagements.
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