Microsoft's Ozzie sees lower margins in cloud computing
Microsoft chief software architect last week warned that the company's margins will not be as robust in a cloud-computing world
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as they have been in the past, Reuters reported.
Speaking at a Silicon Valley event on Thursday, Ray Ozzie acknowledged that " margins on services are not like the margins on software, so [cloud computing] will increase our profit and it will increase our revenue, but you won't have that margin."
Ozzie said that margins at the lowest level --on the company's Azure cloud services, will be thinner than for a full-solution service such as cloud-delivered Exchange "You're pricing that solution around a business value more than cost so the margins are still very, very good."
Still, the question of margins on cloud services has dogged vendors and their partners alike. Many traditional VARs still view vendor-hosted cloud services as a threat that will disintermediate the channel.
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