Cloud computing enters a new phase of acquisitions, mergers and shake-up. Who will lead the pack?

For me 2017 and 2018 were both the year of the animated cloud. 

2 years ago I joined the cloud based platform as a service firm, Nimble Collective, striving to revolutionize the world of animation and cloud computing through its globally available streaming animation platform.  With over 3 decades in animation production, the prospect of world wide, globally available streaming animation tools over the internet, delivered through a public, 24/7 cloud based infrastructure was music to my (probably somewhat jaded) animation ears.  As Director of Business Development, I contributed to the firm's position strategy and operations.  June 2018 starts a new chapter of global consulting for not only technology / cloud firms, but for companies whose mission and market application significantly re-tools a service, sector or business worldwide. 

The cloud is here to stay, and yet there remain significant impediments to fast adoption.  What are these barriers and how quickly can they fall?  What incentives are required to push or pull companies into the public cloud, regardless of whether much needed security, capital expenditure finance response plans and global labor solutions are in place?  What does the future look like for those peering through the looking glass?  Are we really on the edge of a cloud computing global revolution, similar to when the two Steves unleashed the personal computer?  Will individual animated media making take off pulling revenue behind it.  Or will the vision of a global independent creator environment find itself lagging behind snail's pace infrastructure deployment, archaic and complex international subsidy and labor laws, and a holy grail fantasy of territory-neutral crypto-currency transaction.

The next 18 months will shake out the wheat from the chaff as current players position for market lead position and large service firms start to move in, having smelled the potential for profit.  Who will survive the expected shake up?  Who will pull ahead?

Animation is only a small portion of the overall cloud computing market. So, let's step back a moment.  In January Microsoft was compelled to take a $13.8b charge related to new tax laws connected to its cloud computing business.  Already hot on the cloud path, this charge ignited a new fire in the belly of MS to turn its cloud position into a large scale profit center and take point in front of AWS.

From WSJ Jan 13, 2018:
https://www.wsj.com/articles/microsoft-reports-gains-in-cloud-computing-business-1517434433
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"Microsoft already has carved a spot for itself as the No. 2 company behind Amazon.com Inc. in renting computing power and storage over the web. For its fiscal second quarter, the company reported strong gains in the two biggest pieces of its cloud-computing business: its Azure infrastructure services and Office 365 online-productivity business.Though Microsoft doesn’t disclose revenue for those businesses, it said Azure jumped 98% and Office 365 grew 41%. In the previous quarter, Azure gained 90% and Office 365 grew 42%. Its Intelligent Cloud segment, which includes Azure, climbed 15% to $7.8 billion. Its Productivity and Business Processes segment, which includes Office, gained 25% to $8.95 billion."

Microsoft's acquisition of the cloud based coding collaboration site:  GitHub Inc. for $7.5b in stock focuses the company squarely in the cloud and moves its agenda forward.

From WSJ June 5, 2018:  
https://www.wsj.com/articles/microsoft-to-acquire-github-for-7-5-billion-in-stock-1528118504
Microsoft Corp. MSFT -1.57% agreed Monday to buy coding-collaboration site GitHub Inc. for $7.5 billion in stock, one of the biggest in a string of deals by Chief Executive Satya Nadella to transform the software giant beyond its legacy products and focus on fast-growing areas like cloud computing. The deal values GitHub at nearly four times the $2 billion valuation given by private investors in a fundraising round three years ago. GitHub has grown into a major nexus for software developers to share and collaborate on code—it claims 28 million users. The 10-year-old company, which charges corporate customers, doesn’t disclose revenue or profit, and its financial performance isn’t clear.  Acquiring GitHub could help Microsoft persuade more developers to create applications for its cloud-computing business, where customers rent digital resources and applications on demand. Microsoft is racing to catch up to industry leader Amazon.com Inc. in that business.

There is no doubt that Microsoft is on a mission to pull ahead of AWS and Google and assert its dominance.  How will it go about doing this?  Which firms might it partner with or acquire?  We will follow this story closely to see what we can learn about not only MS and its cloud strategy, but cloud based tools world wide, especially open source tools, not bogged down by licensing requirements and reluctant CFOs.

Next up: Who is Satya Nedella and what is his strategy?  We will take a closer look at the man behind this strategy, his motivations, inspirations and sample his writing.

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