11 Dec 2008

Microsoft forecasts lucrative cloud business

Businesses are set to convert to cloud-based services as they look to save money during the current economic climate, it has been suggested.

This means, according to comments reportedly made by Microsoft business division president Stephen Elop, that software-as-a-service (SaaS) applications will increase in popularity.

John Foley, writing at Information Week, commented on Mr Elop's "bold prediction" that SaaS will account for half of the revenue attained from Microsoft's Exchange, SharePoint and Dynamics products within five years.

The IT industry observer noted that based on current growth rates, Mr Elop's prediction suggests that Microsoft will be operating cloud services worth $1 billion (£669,625) by 2010.

Mr Elop has recently cited the economy as a key motive behind the increased interest in hosted services within the IT industry, the article noted.

"There's no question that the degree of interest in online services is greater than I expected, and it's the economy that's causing that," he said.

Microsoft's entrance into the cloud should also be boosted by sales of recently-launched platform services product, Windows Azure, which was unveiled at the Professional Developers Conference on October 27th.