Jes started with a simple question about Microsoft and when the dust settled,microsoft4it was a full on Podcast all its own (it doesn’t take much to wind Toby up).  Microsoft is transitioning from a software and hardware company into one selling cloud services.  No longer do they want to sell you Windows or Office.  They want you to subscribe to Office 365 and pay annually.  There are no margins on hardware.  Established hardware companies like Dell and HP aren’t making much.  As innovations in phones slows down, there will be less and less separating the high and low ends of the market.  Margins are thinning out there as well.  Where you can make money is selling server space to businesses, along with other services that add value in a way that smaller competitors cannot match.

Toby goes on to compare the cloud businesses of Microsoft, Amazon S3, Rackspace and Google.  Some interesting comparisons — and Jes hadn’t even heard of Rackspace.