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Microsoft: Cloud services demand up, prioritization rules in place

zdnet.com

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Re: Microsoft: Cloud services demand up, prioritization rules in place

#101

Post by prepend »

crazygringo wrote: post #6

Wow. 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 would think that additional capacity can be built out to accommodate demand at a rate that still stays profitable after the usage spike. Not that they’re immediately building new data centers, but adding capacity to existing.

Just if Microsoft moved internal usage to underused data centers somewhere on earth they could create more capacity for NA, EU, Asia.

One of the upsides of cloud is that it’s so much easier to meet demand, even as a provider.

I don’t have access to component prices, but I guess they are buying like crazy (aws and gcp too I guess).

Re: Microsoft: Cloud services demand up, prioritization rules in place

#102

Post by icebraining »

p1necone wrote: post #79
freeone3000 wrote: post #70

Earlier quoted context omitted.

Governments will also exert this force on behalf of their citizens, is the happier read. In a disaster, everything becomes finite, but profiteering is still deeply disruptive to the shared societal fabric.

Yep - if there's N capacity to provide a necessary necessary good/service, but M > N need, raising the price doesn't seem like a great solution to manage it in a crisis situation. To some extent non necessary uses would decrease, but you also end up with more wealthy people who want it more getting it, and more generally there won't be any distinction between want and need .

Just like outside a crisis situation.

Re: Microsoft: Cloud services demand up, prioritization rules in place

#103

Post by dehrmann »

hestefisk wrote: post #9

Time to buy MS stock.

Setting the "priced in" bit aside, someone in mentioned their unusual (at least for cloud billing) quota system. If customers are unable to provision new VMs, they could end up offering discounts for essentially missing their SLA. It also depends on how much spare capacity they have to sell.

Re: Microsoft: Cloud services demand up, prioritization rules in place

#104

Post by noitsnot »

dumbfoundded wrote: post #86
__blockcipher__ wrote: post #22

Earlier quoted context omitted.

What makes you think that? Have you seen a discrepancy between your projections of future cash flows and therefore your valuation, as compared to the value the market is at right now?

I think it's safe to say the market isn't rational when Zoom Technologies is up nearly 900% when it's completely unrelated to Zoom Video and not actually operating. There's a different HN post about it: https://www.nasdaq.com/articles/the-sec-really-wants-investo...

I don't think you can really compare people accidentally buying the wrong ticker to investors unable to place valuations based on virus uncertainties. They were buying the wrong stock before the virus hit more than a year ago.

Re: Microsoft: Cloud services demand up, prioritization rules in place

#105

Post by loeg »

vbezhenar wrote: post #69
burkaman wrote: post #16

Earlier quoted context omitted.

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 proper…

Does this regulation applies to the entire supply chain? Otherwise it might become unreasonable to produce some goods at all if component cost raises too much.

Yeah. The result of anti-price-gouging laws is that when businesses' operating costs rise, they are forced to stop operating instead of increasing prices.

Re: Microsoft: Cloud services demand up, prioritization rules in place

#106

Post by loeg »

cosmodisk wrote: post #84
vbezhenar wrote: post #69

Earlier quoted context omitted.

Does this regulation applies to the entire supply chain? Otherwise it might become unreasonable to produce some goods at all if component cost raises too much.

If you are making bread and suddenly price of flour increases by 600%,so you have to increase your prices. Unless you are based in a country run by some delusional autocrat, you'd be fine. If, however,the supply chain is fine, i.e. your toilet paper supplier, however you end up selling it for 500% price because people can't seen to have enough of it- the the laws would apply.

Unfortunately these "delusional autocrats" run the government of, for example, Georgia, Kansas, Louisiana, Mississippi, etc. and would absolutely punish such a baker.

Re: Microsoft: Cloud services demand up, prioritization rules in place

#107

Post by dehrmann »

jbverschoor wrote: post #12
gruez wrote: post #10

Earlier quoted context omitted.

priced in

No it's not.. The market is not sane atm. It's 100% emotion.

5-10% swings are definitely not sane. I think there was technically a 3-day bull market last week, even though there wasn't much news that wasn't foreseeable on Monday.

I read that a lot of hedge funds running heavily leveraged, marginally profitable strategies have been deleveraging. That's a pretty rational response. Some of the movement is emotional, but some is driven by more rational concerns.

Re: Microsoft: Cloud services demand up, prioritization rules in place

#108

Post by loeg »

stefan_ wrote: post #14
crazygringo wrote: post #6

Wow. 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 s…

The article probably overstates actual increase in demand, picking some small subunit which has experienced outsized increased use. They may well want to continue expanding their core hardware capacity at 20%+ annually.

Re: Microsoft: Cloud services demand up, prioritization rules in place

#109

Post by loeg »

bachmeier wrote: post #62
closeparen wrote: post #47

Earlier quoted context omitted.

Right. It's important to the public that scarce goods instead by allocated by willingness to stand in line. What does standing in line mean for a corporation that could be anywhere in the world? Maybe some kind of proof-of-work scheme for the CEO or majority owner? Azure could service VM creation requests in the order of their creation, but "take a number" doesn't work as well. The opportunity cost of what else you c…

> It's important to the public that scarce goods instead by allocated by willingness to stand in line. It's important to keep in mind that a higher price is unlikely to lead to much additional capacity due to the nature of this shock. Companies have to do business with their customers for many years after this is over. "Sorry, we're overloaded with demand due to this crisis" sounds a lot better than "Pay us ten times…

This shock is going to be a lot less short-term than people in this thread advocating anti-price-gouging laws seem to think.

Re: Microsoft: Cloud services demand up, prioritization rules in place

#110

Post by ineedasername »

icebraining wrote: post #102
p1necone wrote: post #79

Earlier quoted context omitted.

Yep - if there's N capacity to provide a necessary necessary good/service, but M > N need, raising the price doesn't seem like a great solution to manage it in a crisis situation. To some extent non necessary uses would decrease, but you also end up with more wealthy people who want it more getting it, and more generally there won't be any distinction between want and need .

Just like outside a crisis situation.

Possibly, but in a crisis situation it is quite a bit more important to deliver adequate service to the "need" group. Outside of a crisis, the "need" group can pursue less expensive alternatives at their leisure. Right now, "fast" is critical.
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