Apple's Mac future resides in the cloud

Absence makes the mind speculate. At least, that's the case for industry observers waiting to see what happens with Apple's overall Mac strategy this week.

My ZDNet colleague, David Gewirtz, believes that Apple's lack of innovation in Mac product releases over the last several years seems to indicate that the platform is running out of steam -- that effectively, the company has "given up" and has ceded mobile PC computing to its competitors, namely Microsoft.

I think "given up" is a bit too strong of a descriptor. I think the correct term is closer to "transitioning away from".

Apple has, since the rise of the iPhone and the iPad and the App Store ecosystem, been deriving most of its income from mobile device products, not Macs.

Cloud Services Market to Top $200 Million in 2016

The worldwide market for public cloud services, such as Amazon.com Inc.’s (NASDAQ: AMZN) Amazon Web Services (AWS), is forecast to reach $203.9 billion in 2016, a year-over-year increase of more than 16%. The fastest growing sector of that market is cloud-based infrastructure as a service (IaaS), forecast to grow from $16.2 billion in 2015 sales to $22.4 billion in 2016, a jump of more than 38%.

When Amazon launched AWS in 2006, the idea that individuals and corporations would store their critical data on someone else’s hardware was nearly unthinkable. That’s all changed now. Netflix Inc. (NASDAQ: NFLX) runs its streaming videos on AWS and Apple Inc. (NASDAQ: AAPL) is another huge customer.

Competitors are stacking up as well, with Alphabet Inc. (NASDAQ: GOOGL), Microsoft Corp. (NASDAQ: MSFT) and International Business Machines Corp. (NYSE: IBM) among the top contenders. Amazon’s 27% share of the market tops second-place Microsoft’s 16% and IBM’s 12% third-place showing, according to report at Forbes.

The big difference for Amazon is that AWS adds revenue and gross profit to the company’s financial performance, where the impacts on Microsoft and IBM are more on the order of reducing the amount of lost revenue and income due to the shift away from enterprise hardware and software to cloud computing.

When Gartner released its forecast for cloud computing revenues in 2016, research director Sid Nag said:
The market for public cloud services is continuing to demonstrate high rates of growth across all markets and Gartner expects this to continue through 2017. This strong growth continues reflect a shift away from legacy IT services to cloud-based services, due to increased trend of organizations pursuing a digital business strategy.


Read More: http://247wallst.com/technology-3/2016/03/22/cloud-services-market-to-top-200-million-in-2016/

Apple signs up to Google Cloud services

Apple has moved some of its iCloud services onto the Google Cloud, marking one of the most high-profile wins for Alphabet's rival to Amazon Web Services since it came under new leadership last fall.

Google has been a distant third in its race with Amazon and Microsoft's Azure as the trio vie for market share in cloud computing, but it has made strides since the appointment of industry veteran Diane Greene as head of that business in November.

Google also scored a victory with Spotify last month, when the music streaming service announced it would shift away from Amazon Web Services and move most of its services onto the Google Cloud platform.

Apple's move to Google comes as part of a broader diversification for its wide range of internet services, which include iCloud backups such as photo storage, music streaming and video downloads. Apple already uses cloud services from Amazon and Microsoft, as well as its own data centers, according to people familiar with the matter.

Apple could eventually take more of these services in-house, and it has disclosed plans to build three new data centres over the next two years, in addition to the four it already has.

As one of the world's biggest companies with rapidly growing needs for storage and computing, Apple is a prize customer for cloud service providers. Analysts suggested that it may be playing providers off of each other at a time of high competition.

Read More: http://www.cnbc.com/2016/03/17/apple-signs-up-to-google-cloud-services-in-major-win-over-amazon.html

IBM vs Microsoft and the battle for the corporate cloud business

One year ago, I wrote a blog post to mark the fact that Microsoft's quarterly results were better than IBM's, and that what had been a tiny start-up when it supplied IBM with PC DOS had overtaken a company that had had a monopoly market share of corporate data processing since the 1930s. Nobody expected that.

Of course, nowadays, both companies are trying to move from fading legacy businesses into fast-growing cloud-based businesses. And, like Apple, both have been hit by "headwinds" in the form of a strengthening dollar, which has devalued their overseas earnings.

IBM had also set itself up for a fall by selling its System X (Intel x86 server) business to Lenovo. This boosted IBM's profits when the deal went through, but hurt its revenues over the full year.

As a result, IBM's revenues fell by 8.5 percent to $22.1 billion in its latest quarter, and its profits fell by 18.6 percent to $4.5 billion. In the same quarter, Microsoft's revenues fell by 2 percent to $25.7 billion, but its profits grew by 8 percent to $6.3 billion.

This was IBM's 15th straight quarter of revenue declines, and in after-hours trading, its shares fell by 4.9 percent to $121.86, the lowest for five years. After Microsoft's results, by contrast, its shares jumped by "more than 8 percent in after-hours trading, but then gave back some of those gains", according to CNBC.

In its full year results, IBM's revenues dipped to $81.7bn, a fall of 11.9 percent. This is a level IBM first achieved in 1998, when Microsoft's turnover was $15.3bn and a struggling Apple could only manage $5.9bn. For comparison, Microsoft's revenues were $88.1bn in calendar 2015, while Apple managed an astonishing $235bn.

IBM peaked at $107bn in 2011, and looks unlikely to see that number again.

Either way, IBM's $81.7bn was some way behind the $93.6bn that Microsoft achieved in its fiscal 2015 results, declared in June. This substantiated my claim that Microsoft really was bigger than IBM.

Read More: http://www.zdnet.com/article/ibm-vs-microsoft-and-the-battle-for-the-corporate-cloud-business/

Microsoft Profit and Revenue Fall, but Cloud Computing Grows

SEATTLE — Satya Nadella has put cloud computing at the center of Microsoft’s strategy. It is a move that looks to be paying off, at least in the eyes of investors.

On Thursday the company said its revenue and profit fell in the last quarter. But it mattered little, as Microsoft made more from cloud computing, and its stock jumped more than 5 percent immediately after the numbers were released.

The results underscored the good and bad trends that have come to characterize Microsoft’s financial results in recent years. On the negative side, there is the floundering personal computer business, which is hurting profits from longtime Microsoft software businesses, especially Windows. On the positive, the company’s cloud business keeps growing, giving investors hope that Microsoft will remain relevant for years to come.

The success of Microsoft’s cloud business under Mr. Nadella, its new chief executive, has put the company’s stock back in favor with investors. Even with recent anxiety in the stock market, Microsoft’s shares are up more than 28 percent for the last year, while shares in rivals like Apple, Oracle and IBM have declined by double digits.

By most analysts’ estimates, Microsoft is in second place in the most prominent segment of the cloud services market — in which computer storage and other services in data centers are rented to customers — after Amazon. IBM and Google are next.

For its second fiscal quarter, which ended on Dec. 31, the company reported net income of nearly $5 billion, or 62 cents a share, compared with $5.86 billion, or 71 cents a share, during the same period a year earlier.

Read More: http://www.nytimes.com/2016/01/29/technology/microsoft-earnings.html?_r=0