The difficult question is how quickly can capacity be increased and given uncertainty about how long this demand increase will last, does it make financial sense to do so?
Microsoft: Cloud services demand up, prioritization rules in place
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Re: Microsoft: Cloud services demand up, prioritization rules in place
#12Re: Microsoft: Cloud services demand up, prioritization rules in place
#13Wow. First of all, I'm curious to what proportions this is driven primarily by remote office work (O365), videoconferencing streaming, recreational video streaming (does Disney+ run on Azure?), or what. But second... I'm fascinated by the concept of prioritization rules in place rather than simply raising prices. I wonder if it "looks bad" to raise prices, or if the vast majority of customers already have locked-in p…
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Re: Microsoft: Cloud services demand up, prioritization rules in place
#14Wow. First of all, I'm curious to what proportions this is driven primarily by remote office work (O365), videoconferencing streaming, recreational video streaming (does Disney+ run on Azure?), or what. But second... I'm fascinated by the concept of prioritization rules in place rather than simply raising prices. I wonder if it "looks bad" to raise prices, or if the vast majority of customers already have locked-in p…
I don't think 1) locking in customers via proprietary APIs 2) limiting supply of resources 3) auctioning off to the highest bidder among your locked in customers was entirely the core feature of clouds. Rather, the idea was "we'll charge so much margin you never need to worry about anything physical, another machine is just an API call away". You don't need to overprovision for peak times and there is less physical stuff on your balance sheet, ez cash flow, win win!
Of course now everyone realizes it's a big sham and neither Amazon nor Microsoft are stupid enough to spend a trillion capex on building the datacenters, fiber lines and so on you need to handle a temporary 700% pandemic situation. In a year from now, they don't want that stuff on their quarterly report just as companies going "cloud only" don't want it.
Re: Microsoft: Cloud services demand up, prioritization rules in place
#15Time to buy MS stock.
I don’t know about that. Long MSFT short AAPL perhaps. But if we believe that the lockdowns will last 2 months+, and if we believe the economic forecasts, we are facing a crisis worse than 2008. Even good stocks sink in those markets. The 30% drop we have seen so far barely reversed Trump’s rally. I don’t know that a severe recession is priced in yet.
Re: Microsoft: Cloud services demand up, prioritization rules in place
#16Wow. First of all, I'm curious to what proportions this is driven primarily by remote office work (O365), videoconferencing streaming, recreational video streaming (does Disney+ run on Azure?), or what. But second... I'm fascinated by the concept of prioritization rules in place rather than simply raising prices. I wonder if it "looks bad" to raise prices, or if the vast majority of customers already have locked-in p…
It would certainly look bad, and I think it would potentially be illegal in some states.
https://consumer.findlaw.com/consumer-transactions/price-gou...
For example, Georgia:
> Selling items or services determined by the Governor during a declared state of emergency to be necessary for public safety at a higher cost than they were immediately prior to the declaration.
Kansas:
> For any supplier of a "necessary property or service" to "profiteer from a disaster" by charging 25% or more than the pre-disaster price for such goods/services.
Louisiana:
> Selling goods/services during a declared state of emergency (within the designated emergency area) in excess of the ordinary price range immediately before the declaration.
Mississippi:
> Selling goods and services at above the prices normally charged during a declared state of emergency (or what was charged immediately preceding the declaration).
etc.
Also consider that raising prices would itself be a form of prioritization, just prioritizing ability to pay over need.
Re: Microsoft: Cloud services demand up, prioritization rules in place
#17Why would Microsoft be disproportionately affected by this? Are we expecting similar decrees from AWS and GCP? Or was Microsoft operating with less runway before this began?
Working with all three of them, so here's my two cents:
1. Mostly traditional, "legacy" companies have been hit hard by this. Ones that don't have culture or technology of work-from-home. Those companies use some Microsoft products. Also, Microsoft has been poaching them heavily, handing out trials, bundling licenses and so on. A lot of them don't actually buy stuff from Microsoft, but through 3rd party vendors which have incentives of their own. Some of the end users don't actually want to use AWS, also.
2. I actually think Microsoft has much less runway. From what I understand, AWS has more modern infrastructure and backend, and they shuffle resources easily around, between services, and I think they have much more in reserve. Microsoft has concentrated much more on the sheer number of regions.
3. Azure has a strange way of handling quotas, if you ask me. Up until now, once you provision a VM, it is deducted from a quota and stays like that as long as it exists. It has never been an issue to actually power it on (unlike AWS), once you have it. It's not billed, but we always thought it stays like that. Since last week, you can see failures not only when provisioning VM's (even within your quota) but also when starting them. Nevertheless, I also think a lot of users had larger quotas allocated then they actually use. So they just started creating more VMs or other resources (because they could), and the thing came crashing. I think that's just poor planning on Microsoft's side.
But the thing I'm mostly pissed of is the status page. VM's are failing left, right and center and everything is nice and green on the status page. Once you open a ticket, they send you an incident-in-progress report.
Re: Microsoft: Cloud services demand up, prioritization rules in place
#18Wow. First of all, I'm curious to what proportions this is driven primarily by remote office work (O365), videoconferencing streaming, recreational video streaming (does Disney+ run on Azure?), or what. But second... I'm fascinated by the concept of prioritization rules in place rather than simply raising prices. I wonder if it "looks bad" to raise prices, or if the vast majority of customers already have locked-in p…
>does Disney+ run on Azure?
Some cursory web searching suggests that at least as of 2017, BAMTECH / Disney were using AWS as their public cloud provider. There's enough inertia here that you'd imagine that this is still the case.
Re: Microsoft: Cloud services demand up, prioritization rules in place
#19So that's why my OneDrive sync hasn't been working at all.
Re: Microsoft: Cloud services demand up, prioritization rules in place
#20Wow. First of all, I'm curious to what proportions this is driven primarily by remote office work (O365), videoconferencing streaming, recreational video streaming (does Disney+ run on Azure?), or what. But second... I'm fascinated by the concept of prioritization rules in place rather than simply raising prices. I wonder if it "looks bad" to raise prices, or if the vast majority of customers already have locked-in p…
> I'm fascinated by the concept of prioritization rules in place rather than simply raising prices
Do you realise that it's potentially illegal to increase prices based on market demand during a crisis?