Microsoft has announced that it intends to keep the hardware for operating its cloud services in operation for a longer period of time. After four years, as before, the server and company will be replaced only six years in the future. This is mainly for economic reasons.
The extension of the amortization period begins immediately with the recently started fiscal year 2023, as announced by Microsoft Chief Financial Officer Amy Hood in an earnings conference call with investors. that investor meeting transcript Published by the company itself.
billions in savings
The change is primarily for financial reasons, has a direct impact on further server hardware purchases and is thus already on the balance sheet as of June 30, 2022. With the extended amortization period extended to six years, Microsoft expects total savings of $3.7 billion in fiscal year 2023, including $1.1 billion in the first quarter.
Among other things, “investments in our software that make the operation of our servers and network equipment more efficient,” Hood continued. In combination with technological advancements, server hardware can now be used for much longer than before.
Trends among hyperscalers
The other two hyperscalers AWS and Alphabet/Google recently announced that they intend to use server hardware for a longer period of time in the future: but Alphabet’s Google Cloud Useful life should extend to three to four years AWS Four to five years, as reported by The Register.
It is not known if and how the change will affect prices for cloud customers. A recent study published by the Uptime Institute looks at the cost of cloud operations from a company’s perspective.
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