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From the report published by SEC, the most captivating initiative that Microsoft Corporation is the adoption of the cloud model of communication. In this model, Microsoft intends to connect PC’s, cell phones, and other communication devices through what it refers to as the cloud. Apparently, Microsoft has devoted an immense amount of financial resources and efforts to this model (SEC 2011). The aim of this paper is to take a close look at the possible positive outcomes of the venture. To back this up it will include a brief section of financial analysis.

Cloud-based technology is designed to provide customers with services and other products such as software over the internet. According to SEC (2011), the shift from client/server to computing in centralized data location is motivated by three most possible breakthroughs. To start with, the firm is optimistic that by incorporating this model, creation of large data centers will involve lower operational costs compared to the smaller ones associated with client/server use. Large data centers will diversify customer base and accessibility, geographical coverage of its products, as well as improve communication capabilities and data storage (SEC 2011). In addition, this model significantly lowers the cost of maintaining application. Secondly, the cloud model presents the firm with exclusive elasticity levels, which will consequently provide a platform for hatching solutions.

In this possible product excellence, the entertainment arena is not left out. The initiative is bound to enhance the customer accessibility of the major entertainment devices at the same time broadening market accessibility of the firm’s products and services (SEC 2011). The figure below is an illustration of financial analysis performed by the firm as a result of the inception of the model. A brief interpretation is provided below it.

From the above illustration, an increase in revenue is deducible. This was as a result of improved sales of the various software, games, and other services offered through the model (SEC 2011). The table shows the financial situation of the firm in the period between 2010 and 2011. The comparison between the two period aims to show if there are any significant changes relating to the costs and revenue accrued to the firm.

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