Amazon hits new heights; Microsoft reorgs; IBM closes SoftLayer deal: the week ... - GigaOM

Amazon shares hit the stratosphere

The Amazon bashers that fill SeekingAlpha and other sites with diatribes about Amazon shares being overvalued, had a rough day Friday when the company's stock price hit $307 per share.

That put the company's market cap at a cool $140 billion. That's not chump change although, as AllThingsD pointed out, it's still eclipsed by Google ($306 billion); Apple ($400 billion). I would add that it also has a way to catch up with — pay attention Redmond haters — Microsoft at $297 billion. But, it's also twice the market cap of social media power Facebook at $63 billion.

USA Today attributed that stock price to a court finding last week that Apple conspired with e-book publishers to fix the price of their products, not to anything to do with Amazon Web Services might in public cloud, but developments here bear watching by cloud observers nonetheless.

AMZN data by YCharts

Microsoft reorg nixes business units, transparency

Last week's much-anticipated Microsoft reorganization blew up the company's existing business units and in the process will make the performance of the company's unprofitable businesses (Bing and Xbox and perhaps "cloud") harder to assess.

Qi Lu, who had headed search, now has responsibility for "broad applications and services core technologies in productivity, communication, search and other information categories," according to Microsoft's statement. That means he gets cash-cow Office — both in its traditional and Office 365 incarnations — and that will make it harder to assess how much Microsoft earns from subscription services vs. traditional licenses.

As Nomura Securities analyst Rick Sherlund wrote in a research note, this is a "pretty radical departure."

"We do not think of Qi Lu as an individual that is focused on Office productivity as much as search, so this underscores the importance of Microsoft to move Office to the cloud and perhaps deliver more integration with Bing and Bing's knowledge of internet content and features (mapping for example)." This revenue parsing issue arose last year when a Microsoft exec claimed that the company had sold $1 billion worth of Azure cloud related services last year, a claim that was met with skepticism since it appears he lumped in a lot of non-Azure stuff into that category.

Aside from QiLu, Microsoft's other new engineering leads are Terry Myerson, who now owns the Windows OS across all devices; Julie Larson-Green who owns the devices themselves, including Xbox; and Satya Nadella who retains Windows Azure cloud.

One former Microsoft exec said this reshuffling gives CEO Steve Ballmer more centralized control. "SteveB doesn't need to worry about someone like Stevesi [former Windows chief Steve Sinofsky] making unilateral decisions anymore," he said via email.

"Julie can't ship without Terry. Terry has no product until Julie delivers the hardware. Satya's world remains mostly unchanged. Supply management and hardware at Microsoft will always be a struggle [and will be a] tough job for Julie to succeed in. It's still a software company. And we'll never get more insight into Bing now that Office revenues can disguise what is really going on in Bing and MSN money losing operations."

IBM closes SoftLayer buyout

A month after announcing plans to acquire SoftLayer (for an estimated $2 billion), IBM closed the deal last week. But the plan is not necessarily, as has been reported, to convert SoftLayer's 13 data centers to OpenStack, the open-source cloud platform that IBM (and other companies) have backed.

"At this point we are committed to supporting OpenStack via new services and features, etc. but our data centers will run on our own IMS software," a SoftLayer spokesman said via email. SoftLayer already supported parts of OpenStack — notably the Swift storage subsystem – but was also considered to be part of the rival CloudStack team and based its private cloud implementation on CloudStack.

Earlier this month, ITworld reported that IBM will hedge its bets by offering both OpenStack and CloudStack options, a game plan the SoftLayer spokesman confirmed.

With this deal, InformationWeek reported last week, Dallas-based SoftLayer joins IBM SmartCloud in a new IBM's cloud services division, headed by GM James Comfort. SoftLayer CEO Lance Crosby and the rest of the executive staff will stay on under "multi-year contracts." The division will be part of the gigantic IBM Global Services unit. SoftLayer offers IaaS as well as dedicated hosting and managed hosting options which gives enterprises deployment choices.

More of note from around the interwebs

• From The Register: Cloud pricing begins to take hold within the firewall
• From Computerworld: Microsoft reorganization leaves Dynamics in a sweet spot
• Easy peasy glossary of cloud computing terms from AVG.