Microsoft's cloud computing business is booming as of Q1 2018. They have gained significantly on Amazon's AWS and are ahead of the pack against competitors like Google, IBM, Oracle and SAP. What sets Microsoft for success on the cloud are it's services, namely - software, platform, infrastructure and even forays into gaming and possibly the blockchain. These are provided as a service on the cloud. Applications like Office (now Office 365) have found new life away from the desktop and on the cloud. This allows businesses to purchase their cloud subscription using popular Office applications like Outlook for e-mail, Word for documents, Excel for spreadsheets and PowerPoint for presentations. The difference is now the work can be done on the cloud without any "fat client" installed. This allows anyone to work from anywhere with an Internet connection that has access to the cloud via a web browser. This is saving businesses time and money when cost cutting and "thinner clients" are necessary. In the beginning of this year Microsoft surpassed Amazon in cloud based revenues at $6B compared to $5.44B. Microsoft's main cloud product, Azure, is their computing platform that opens up to the rest of their cloud ecosystem. From Azure, like in AWS, there are a vast number of products users and businesses have at their disposal. Subscriptions are much less than owning your own hardware and software, which is the idea of the public cloud. For more specialized needs, there are private cloud services as well, though the public cloud is more ideal for cost cutting measures and leveraging the benefits of out sourcing all the administration to Microsoft. Imagine the costs of maintaining a data center when you can just use cloud services to virtualize your environment.
Another advantage Microsoft has is in the implementation of "Hybrid Cloud" architectures. Since many businesses already have existing Microsoft networks that run on Windows, this provides another layer for applications and development. So it is a combination of on site premise equipment with the cloud services like IaaS, SaaS, PaaS, etc. An existing enterprise environment have their own LAN consisting of desktops and other devices. They are connected via a WAN to the Internet, which is the pipeline to the cloud. In the hybrid system, users work from both their current network with access to the cloud. Most development in the past was done on sandboxes installed locally but now that can be virtualized on the cloud, which saves on purchasing additional hardware. A virtualization layer, or a hypervisor, is used to create and support Virtual Machines (VMs) as well as containers. These allow software developers to quickly deploy applications using resources on the cloud to a physical bare metal host or another virtual server, without having to build another physical network segment on premise. Another usefulness for the Hybrid Cloud is that admins can still control their local network resources while offloading additional compute and storage resources on the cloud. It is also very much more streamlined for ease of access since it can be integrated with business workflow.
It's also in software and productivity where Microsoft has been successful, and now delivering those products from the cloud gives Microsoft another huge market reach for existing customers. Developers who are already a part of the Microsoft solutions ecosystem (C#, Visual Studio, SQL Server) will benefit tremendously with the cloud solutions offered. These include AI and even Linux, something Microsoft now provides as part of it's acceptance of open source systems. Microsoft's strategy of embracing the cloud and extending it with AI and Big Data is providing solutions in today's computing environments.
Further Reading:
Microsoft tops Amazon Q1 2018
https://www.forbes.com/sites/bobevans1/2018/04/27/microsoft-tops-amazon-in-q1-cloud-revenue-6-0-billion-to-5-44-billion-ibm-third-at-4-2-billion/#2d24c5135d4b
Microsoft Revenues are UP thanks to the Cloud
https://www.engadget.com/2018/04/26/microsoft-q3-earnings/