Cloud Computing To Bolster Revenues For Microsoft Reports Bernstein

Bernstein is optimistic about Microsoft's ongoing Office transition.

The Build Conference held this year was a platform for Microsoft Corporation to lay out the expectations for is Office platform. Bernstein, the popular equity research organization mentioned in a recent note to investors and customers talked about the impacts of Microsoft’s predictions on their earnings report.

In the Build Developers Conference, the company talked about three core aspects that talk about the growth of its Office platform. According to BidnessEtc, “Commercial Office installed base growth, timing of mix shift to Office 365, and increase in customer value as customers shift to Office 365. Bernstein noted that it is highly crucial to gain an insight into how the transition of customers to Office 365 affects Office gross profit since Office is Microsoft's largest business line.” This is said to be the biggest transition to cloud computing that is happening currently.

Bernstein believes that the gross profit of Microsoft’s Commercial Office is likely to experience a 6 percent increase in CAGR in the coming three years due to three reasons. Firstly, the company has decided to couple several products that were initially sold on their own. Currently, we have two bundles that come complimentary with Microsoft Office Commercial offerings namely, Data Centre apps and Office Desktop apps. PowerPoint, MS Word and Excel are a part of the Office Desktop Centre applications. Through Office 365, the Desktop applications are allowed to move from licensed to subscription based software with a relatively minimal amount of cloud services.

Apart from this, the Data Center packages comprise of apps like Skype for Business, Exchange and SharePoint. These were only retailed to enterprise based clients and are now being moved to cloud gradually. According to Bernstein, this will result in a rise irrespective of which platform it is offered that is license sale or Office 365.

Bernstein has also weighed on MicrosoftCorporation, where the company is embracing an ongoing transformation in terms of gross margin profit. The firm has made a forecast where the coming three years can bring a 50 percent of the Office Desktop app and almost two third of these Data Center apps can be made available via Microsoft Office 365. This will help them make a significant rise in terms of its Office Suite performance.

Hence, Microsoft has a stable future in the times to come provided it gives due attention to its cloud computing business which has immense potential to grow. This will not only provide the company stability but will also stabilize them in the long run.