Microsoft (NASDAQ: MSFT) emulates a strategy used by Amazon (NASDAQ: AMZN) and Salesforce (New York Stock Exchange: CRM), among other things, to boost its cloud business, targeting customers who traditionally did not use the cloud at all, The information reported.
Microsoft, based in Redmond, Wash., has reportedly invested $200 million to build an acquisition team so it can boost sales to cloud holdouts, a strategy that Amazon, Salesforce and Zoom (ZM) have used, the report added. media.
These so-called middle-market customers have traditionally not used cloud products, making Azure a priority for the roughly 500 vendors that Microsoft (MSFT) has hired to fill the niche.
Microsoft (MSFT), which is expected to report its fiscal third quarter results Tuesday after the close, now generates 48% of its revenue from cloud-related products, up from 42% a year ago and 36% in 2020, according to the investment company Piper Sandler.
Analyst Brent Bracelin, who rates Microsoft (MSFT) overweight with a price target of $352 per share, noted that “the transformation from the cloud model to [Microsoft] should help insulate growth in the March quarter, despite rising global risks.”