00:00 Speaker A
And looking at Microsoft 365 copilot with 30 million paid users. It was up 10 million quarter over quarter. Um and that’s something that we saw them tout.
00:10 Speaker A
That, you know, it seems like when we ask about ROI, like that’s an area maybe where and I feel like co-pilot kind of gets
00:20 Speaker A
um what’s the word? Craped on? Am I allowed to say that?
00:23 Speaker B
Yeah, dumped on. Yeah, trashed.
00:24 Speaker A
Yeah, it’s fine. So, you know, people are a little bit people in tech are a little bit like snobby about co-pilot, but it feels like it, you know, it’s starting to work.
00:32 Speaker B
It it also is interesting to see that Azure topped $100 billion in revenue for the first time for for the year. Yeah. Um, I think that, you know, the co-pilot payoff is something that people have been looking for for a while.
00:41 Speaker B
And so that obviously tied to the fact that they were able to, you know, moderate spending on the data center side. I think that really gave people the boost saying, okay, well maybe they maybe they do know what they’re doing.
00:54 Speaker B
And it’s it’s been interesting because Microsoft is, you know, they’re spending billions, right? It’s not as though they’re not spending, but they’ve been more judicious about how they they spend. You know, if you look at the way meta or Amazon or Google have been doing it versus Microsoft and Microsoft’s, you know, kind of knock against them is, well, they’ve they’re constantly capacity constraint. Well, so’s everyone else.
1:12 Speaker B
You know, and I I think yesterday they said they stood up their 31st maybe data center uh and they have uh 88 total. Um so it’s not as though they don’t have, you know, the the fleet.
1:23 Speaker A
Well, and if you look at meta, which isn’t capacity constrained, they have too much.
1:28 Speaker A
And like obviously the market prefers capacity constrained to have.
1:33 Speaker B
It shows it shows that you have the demand and you just have to now meet that. You’re not you didn’t overbuild.
1:37 Speaker A
And they’re also monetizing it to its fullest. whereas meta is not. Right.
1:41 Speaker B
It’s also worth noting their remaining performance obligations beat expectations. Now you don’t necessarily want remaining performance obligations. That just means that well, people are signing on, they want this, but you can’t deliver on it because you just don’t have the the capacity. But
1:58 Speaker B
nevertheless, it means that they still have a $678 billion worth of interest. Now, they said that that would pay out over several years, but it’s still worth noting that it it, yeah, the expectations were for 647.6 billion. They came in at 668. So, they they are seeing continued long-term interest in what they have to offer.
2:20 Speaker A
This CAPEX mention here, the fact that they are not spending as much this year, $175 billion dollars. As you say, it’s still a lot. But it answers the question of like, what what happens if these companies don’t spend as much as predicted?
2:33 Speaker B
In this case, it’s a good outcome.
2:35 Speaker A
I also think it’s so interesting that it’s because they’re extending the life of their equipment. Yeah, yeah. Right? Which is something we had been, that had also been one of the outstanding questions out there. How long is this stuff going to last?
