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New Microsoft Corporation CEO Ramps Up Its Strategy in the Cloud

By Daniel Sparks – Feb 20, 2014 at 8:00PM

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In a major update, SkyDrive gets far more than a new name.

Microsoft's (MSFT -2.06%) SkyDrive, renamed OneDrive, received more than a name change when it rolled out globally yesterday. The cloud storage service was bolstered with a number of new features, making the product more competitive among a plethora of competing alternatives. As one of the company's first major moves under CEO Satya Nadella, is the company's increased focus on software and services a sign of things to come? After all, Nadella previously held the position of executive vice president of Microsoft's Cloud and Enterprise group.

Image source: OneDrive official blog

"Our goal is to make it as easy as possible for you to get all of your favorite stuff in one place -- one place that is accessible via all of the devices you use every day, at home and at work," said Chris Jones, Microsoft corporate vice president of Windows services, in a blog post announcing the rollout. Sounds a bit like Dropbox, doesn't it? It might also sound a bit like Google Drive, Amazon Cloud Drive, and Box. The space is littered with competitors.

Despite clear competition, Microsoft's new features suggest the company plans to take consumer cloud storage seriously. New features include, automatic camera backup for Android, the ability to share and view videos just as easily as photos, 500 MB of incremental storage for every referral (on top of 7GB of free storage initially), and 3GB just for using the camera backup feature.

A good move?
Monetizing users that initially opt for the free features in cloud services and software isn't easy work. A number of cloud companies have faced troubles with this tricky business -- LogMeIn, SugarSync, and Droplr to name a few. Why, then, can Microsoft expect to get any profits out of OneDrive?

Perhaps OneDrive's close ties with Office, SharePoint, and other Microsoft products the company has ushered into the cloud means more opportunity to turn free into sales through interdependent products. But even if it can't, there is still an argument for OneDrive as a prerequisite for a company that clearly aims to capitalize on opportunities in the cloud. Whether OneDrive translates into sales directly, indirectly, or not at all, services like these improve the whole picture of Microsoft's cloud services and software. Over the long haul, convenient cloud storage is a good investment for Microsoft -- not because it may make money, but it's a necessary step in serving customers.

As one of Nadella's first moves as CEO, could the executive who once oversaw Microsoft's cloud services be giving investors an early look into Microsoft's plan? Is cloud software and services going to continue to take an increasingly larger role at Microsoft at the future?

Daniel Sparks has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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