Microsoft Taking Clouds Seriously

Microsoft

Microsoft Corp’s business-software unit expects to get at least $1 billion  from web versions of its Office and e-mail programmes in the next three to five years, said Stephen Elop, head of the division.

Over that period, Microsoft predicts about half its customers for e-mail and collaboration software will switch to so-called cloud versions of the programmes, which are stored and run from Microsoft’s server farms.

“Three years, five years, is it a billion-dollar business? I’m quite certain it will be,” Elop said in an interview on Bloomberg Television. “Because so much of what we’re doing is focused on this particular area, we’re seeing very large customers making large commitments in this direction. You’ll see it grow rapidly.”

The rising revenue will mean Microsoft can increase profit at the unit, Microsoft’s largest, even as analysts predict margins will narrow, Elop said. The company is readying its first web-based versions of word-processing and spreadsheet software to match Google Inc., which is trying to steal Microsoft’s corporate customers and win over consumers.

Redmond, Washington-based Microsoft is also pushing cloud versions of its Exchange e-mail programme and SharePoint, which allows employees to work together on projects and set up corporate web sites.

Microsoft rose 7 cents to $28.67 at 4pm New York time on the Nasdaq Stock Market. After gaining 57 per cent last year, the shares have lost 5.9 per cent in 2010.

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