Microsoft will replace its data center hardware less quickly. The policy was to replace all network and server hardware after four years, but that period has been extended to six years. This will save Microsoft $1.1 billion per quarter (over €1 billion).
During the presentation of its quarterly figures, Microsoft announced it will replace the hardware in its data centers, and thus Azure regions, less quickly. The replacement period was increased by 50 percent to six years. That’s quite a long time for hardware that’s used intensively.
According to Microsoft, it invested in software that enables it to handle server and network hardware more efficiently. In addition, Microsoft says the quality of server hardware improved in recent years.
Microsoft solves capacity problem
However, we cannot ignore the fact that Microsoft Azure is facing capacity problems. Microsoft is struggling to keep up with Azure’s growth. This is undoubtedly related to supply chain issues and the global chip shortage.
By extending the life of the hardware, Microsoft needs to replace less hardware. This means that most of the purchased hardware that’s being delivered right now can be used for new customers or new workloads from existing customers. The new hardware doesn’t need to be used to replace existing hardware. As a result, Azure can continue to grow.
Good for the environment, but not without risk
Customers will undoubtedly receive the decision with mixed feelings. On the one hand, it’s a good thing if the hardware’s lifespan truly increased. After all, long-lasting hardware is better for the environment. Also, the prices of Azure solutions could theoretically go down, because costs also go down when you use the hardware for a longer period. As there’s currently a lot of inflation and rising energy costs, it remains to be seen whether this price drop will actually materialize.
On the other hand, extending the hardware’s lifespan increases the risk of malfunctions and breakdowns. Microsoft claims to have software that increases the hardware’s efficiency and likely monitors the hardware. If Microsoft can thereby intervene before the hardware breaks down, there’s not much to worry about. However, the question is how well Microsoft can measure all of this. Hopefully, Microsoft has a reliable system to prevent failures, and the extension of the lifespan is motivated by innovation and quality improvement, not by capacity problems.