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Cloud services, such as Microsoft’s Azure platform, will be less profitable for the company than its software sales, said Ray Ozzie, Redmond’s chief software architect. He said the same thing back in a March 2008 interview with Om as well. Ozzie made his latest comments at an event in Silicon Valley on Thursday , adding that while cloud computing had lower margins, it would result in increased sales. “The margins at the low level, at the Azure level, are going to be lower than the top level, where you’re delivering a solution or something like Exchange,” said Ozzie, referring to Microsoft’s popular e-mail and calendar application. “You’re pricing that solution around a business value more than cost so the margins are still very, very good.”
Ray Ozzie: Cloud Platforms Are Less Profitable