By John Foley, Reuters Breakingviews
FORTUNE -- Microsoft is staging a comeback in China. The world's biggest software maker hopes to use the twin technological disruptions of cloud computing and mobile devices to get a second bite of a market where profit has proved elusive. Yet the financial benefits may be no easier to grasp the second time round.
Microsoft is due to launch Windows Azure, its cloud computing platform, in China in June, in partnership with local company 21ViaNet. Under the agreement, 21ViaNet would collect client revenues and pass a percentage on to Microsoft. China restricts foreign companies' ability to offer "value added telecoms" services, leading most to partner with local players.
The software giant plans to hire thousands of new employees in China for the launch and for the roll-out of smartphones, chief executive Steve Ballmer said last week. Microsoft currently has a workforce in the country of around 4,000.
China has been a piracy trap for Microsoft: many use its products, but few pay. Founder Bill Gates famously argued that he would rather see Chinese users steal his products than someone else's, and they took him at his word. In 2011 Ballmer complained that Microsoft (MSFT) generates less revenue in China than in the Netherlands -- though that will have changed since Microsoft started charging smartphone makers like ZTE patent fees. According to the Business Software Alliance, 77% of software by value was pirated in 2011, based on an estimated illegal software market worth $9 billion.
Cloud and mobile services may provide an antidote. Windows Azure, the company's cloud computing platform, is set to launch in June, and the hope is that piracy will be less of a problem in the cloud, where companies and developers store data and software on third-party servers rather than local PCs. In mobile, operating systems tend to be pre-installed by handset manufacturers, which creates tighter control over who's using what.
Yet competition is fierce. Alibaba, which already handles over 80% of online commerce, has high hopes for its own cloud computing service. While revenues from "public cloud" services are set to grow to $3.8 billion by 2020, according to Forrester, that's still less than half the Business Software Alliance's estimate of the Chinese market for illegal software. As for mobile, the industry is dominated by versions of Google's Android operating system.
Microsoft may also escape the piracy trap only to fall into a political one. Foreigners aren't allowed to offer "value-added telecoms" by themselves, so Microsoft must share its cloud revenue with a local partner. Since cloud computing features in the Chinese government's current five-year plan, the market is likely to develop in ways that favour local players. That makes Microsoft's chances of turning China into a big source of revenue look pretty nebulous.
Read more at Reuters Breakingviews.
The German software giant is betting on cloud-based technology and services.
FORTUNE -- In case you haven't heard, SAP is serious about the cloud. On Tuesday the enterprise software giant announced it will offer HANA, its in-memory database, as a monthly subscription service, delivered via the cloud.
A limited cloud-based version of HANA was already available through Amazon (AMZN) Web Services. But SAP (SAP) says customers will now be able to access MOREMichal Lev-Ram, writer - May 8, 2013 10:26 AM ET
But the software giant has set ambitious goals. Can it reach them?
FORTUNE -- It's been over a year since German enterprise software giant SAP shelled out $3.4 billion for SuccessFactors, a Silicon Valley-based maker of human resources software. Since then, engineers on both sides of the Atlantic have been hard at work getting SuccessFactors's cloud-based apps to work alongside SAP's on-premise offerings, so that customers can more easily adopt the MOREMichal Lev-Ram, writer - Apr 12, 2013 7:13 AM ET
With a new laptop, Google is betting that living in the cloud on an ultrabook is not just cheaper, but much better.
FORTUNE -- Cloud computing has been around for some time now. But not many people believe they can do all their computing in the cloud. Not many, that is, outside the brainaics at the Googleplex.
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Meet the mysterious "tactical data center" that just popped up on Apple's server farm
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The corporate training software maker took top spot in Brainstorm Tech's contest for the perfect pitch.
FORTUNE -- The problem with corporate training is obvious: Almost nobody pays attention. It's not uncommon for employees to brag about coasting through sessions while doing something else at the same time. Worse, important policies and security procedures are typically presented once during a new worker's training and seldom significantly revisited. In a workplace where MOREJP Mangalindan, Writer - Jul 30, 2012 5:00 AM ET
Marc Benioff has the mind of a fox and the body of a bear. He's also a super salesman who's built a Bay Area giant that employees love for being prosperous and good.
By David A. Kaplan, contributor
FORTUNE -- It took a Reuben sandwich and Dr. Brown's Cream Soda to close the deal.
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FORTUNE -- Fierce competitors need, well, fierce competitors. The latest smack-down? Oracle (ORCL) billionaire CEO Larry Ellison vs. Salesforce.com (CRM) billionaire CEO Marc Benioff. Benioff once worked for Ellison, who later invested in Salesforce.com, the cloud-computing software company. No matter: Now the two battle for customers -- as well as bragging rights as the world's most visible software mogul. The rivalry is getting testy: Recently Ellison canceled Benioff's keynote at the MORENov 28, 2011 5:00 AM ET
"Let me describe the world I live in"
Steve Jobs got a lot off his chest in his Q&A session with developers at WWDC 1997 -- the first after he returned to Apple (AAPL) from his years in the desert at NeXT.
We've dipped once before into the 70-minute video (available here) to highlight his remarks about Wall Street and the press. (See The stock will take care of itself.)
But there's lots MOREPhilip Elmer-DeWitt - Sep 24, 2011 5:41 AM ET
Cloud computing is clearly here to stay. But these factors could make the transition a bumpy one.
FORTUNE -- Earlier this week, portions of Amazon's cloud computing service crashed, impairing Foursquare, Netflix and Instagram as well as millions of users. While service was quickly restored, it marked the second major incident of its kind in the last six months -- and that is raising concerns with some.
Putting parts or all of MOREJP Mangalindan, Writer - Aug 12, 2011 1:02 PM ET
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