Microsoft commits $5 billion to IoT projects

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Microsoft has announced that it will pour $5 billion into IoT over the next 4 years. To date, Microsoft has spent $1.5 billion, so this moves could be viewed as a step change in the organization’s commitment to IoT.

This makes sense for Microsoft. The company has fallen behind in the consumer technology race. It appears to be moving towards cloud and infrastructure projects instead. Azure has given it a strong position, but with AWS setting the pace in the cloud field, Microsoft needs to move quickly if it is to position itself as the frontrunner in the future of IoT.

Julia White, CVP of Azure said this:

“With our IoT platform spanning cloud, OS and devices, we are uniquely positioned to simplify the IoT journey so any customer—regardless of size, technical expertise, budget, industry or other factors—can create trusted, connected solutions that improve business and customer experiences, as well as the daily lives of people all over the world. The investment we’re announcing today will ensure we continue to meet all our customers’ needs both now and in the future.”

The timing of this huge investment has not gone unnoticed. At the end of March, Microsoft revealed that it was reorganizing to allow itself to place greater strategic attention on the ‘intelligent cloud and intelligent edge’. It’s no coincidence that the senior member set to leave is Terry Myerson, the man who has been leading the Windows side of the business since 2013.


However, the extent to which this announcement from Microsoft is really that much of a pivot is questionable. In The Register, Simon Sharwood writes:

“Five billion bucks is a lot of money. But not quite so impressive once you realise that Microsoft spent $13.0bn on R&D in FY 2017 and $12bn in each of FY 16 and 15. Five billion spread across the next four years may well be less than ten per cent of all R&D spend.”

The analysis from many quarters in the tech media is that this is a move that marks what many have been thinking – managing Windows’ decline in favour of Microsoft’s move into the cloud and infrastructure space. It’s pretty hard to see past that – but it will be interesting to see how Microsoft continues to respond to competition from the likes of Amazon.

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