Steve Ballmer needs Microsoft had entered the cloud computing market sooner
Steve Ballmer, chairman of the Los Angeles Clippers and co-founder of the Ballmer Group, speaks during the GeekWire Summit in Seattle, Washington, USA on Tuesday, October 8, 2019. The summit attracts attendees from around the world to explore what next comes in technology, business, science and society.
David Ryder | Bloomberg | Getty Images
Former Microsoft CEO Steve Ballmer said Thursday he regretted not getting into cloud computing earlier.
The discussion points to Amazon's success in building a business that leases computing and storage resources to corporations, governments, and schools.
Amazon has entered the market well ahead of Microsoft, IBM, Oracle and other information technology providers and has maintained its lead. Two analysts estimated that Microsoft's Azure Cloud had sales of over $ 7 billion in the fourth quarter, while Amazon's rival Web Services business had sales of $ 12.7 billion in the same period. AWS's success has brought its leader Andy Jassy to the helm of Amazon, where he will replace Jeff Bezos later that year.
"Azure – I wish we'd probably started a year or two before," Ballmer said in an audio conversation that was broadcast live on the Clubhouse mobile app. "We actually started with the platform as a service instead of the infrastructure as a service. We'd probably do it a little differently. It took a little time in the later battle with AWS, if you will."
Amazon's EC2 Computing Service and S3 Storage Service were launched in 2006, and Microsoft introduced its first Azure offerings in 2008. Windows Azure, at the time the most direct competitor to Amazon's core infrastructure offerings, did not become available until 2010.
In 2011, Satya Nadella took over the leadership of the organization, which also included Azure, and in 2014 replaced Ballmer as CEO of Microsoft. Since then, Nadella has emphasized the role of the cloud in Microsoft's business. In 2017, Nadella wished Microsoft had started in the cloud earlier, and last year he gave Ballmer credit for supporting the company's cloud efforts.
"You can see that everything comes into play," said Ballmer on Thursday. "Because it was a series of pain points that might not have been recognized as such, but then be patient with them."
Ballmer also said Microsoft should have built phones sooner if it competed in that market. In 2015, the company wrote down $ 7.6 billion in goodwill and assets when it restructured its phone hardware unit after purchasing Nokia's device business for $ 9.5 billion in April 2014 , less than three months after being taken over by Nadella. The deal came more than six years after Apple released the first iPhone. Until the end of 2017, Microsoft's phone revenues were "insignificant" according to a presentation to investors.
Ballmer took part in the discussion alongside Sriram Krishnan, general partner of the venture capital firm Andreessen Horowitz and former Microsoft program manager, and Steven Sinofsky, an Andreessen executive partner who held a management position at Microsoft under Ballmer. The company announced an investment in Clubhouse last month after founders Marc Andreessen and Ben Horowitz performed and more users from diverse backgrounds attended. The app is currently only available on Apple's iOS devices.
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