Microsoft
CFO Amy Hood repeated the company’s recent forecast that its suite of generative artificial intelligence tools will reach $10 billion in revenue faster than any other business in the software business’s history.
Speaking at the Goldman Sachs Communacopia & Technology Conference in San Francisco, Hood said that “the opportunity is already there,” and that there is “pull” from customers for AI enterprise software. The company has already announced a range of AI-driven products, including a $30-a-month per user co-pilot for the company’s Microsoft 365 office suite.
Hood said that customer feedback on the 365 co-pilot has been good. The system has “changed for me how I work,” for simple things like changing all the fonts in a 40-page deck, she said.
“The feedback informs the price,” she said. “The price is value based. This can’t be tech for tech sake. It is about the value and efficiency of your work. If it does that, it will be at the top of the IT budget list. We will dicker, but that’s the bar. You have to earn that through making it obvious that customers’ employees’ lives got better.”
For that product in particular, she said, there is a huge target market, with 160 million users for Microsoft 365.
Hood also weighed in on the recent “optimization” trend that has slowed growth at Microsoft Azure and other cloud providers. She said that optimization is really just a standard part of running large cloud workloads, with customers trying to be as efficient as they can. The challenge for Microsoft, she said, is to encourage customers to invest savings in new workloads. She also notes the company is starting to lap some of “the biggest optimization quarters,” which should make for better growth numbers in quarters ahead.
Asked about the macroeconomic outlook, Hood said that the company continues to be long-term believers in tech growth and that IT spending as a percentage of gross domestic product will eventually double from here.
“We try to control what’s controllable to us,” she said. “We focus on market share gains and staying competitive.”
On another topic, Hood noted that the company’s new Starfield game is off to a fast start, with one million concurrent users on the first day. “We have a lot of optimism about the title,” she said.
Write to Eric J. Savitz at [email protected]
Read the full article here
