> cost of doing business is increased to include data centers, power, and bandwidth
Microsoft Azure was launched in 2010. They've been a "cloud" company for a while. AI just represents a sharp acceleration in that course. Unfortunately this means the software products have been rather neglected and subject to annoying product marketing whims.
They've had cloud products for a long time, but I don't think that Microsoft fundamentally changed. I still see them organized and treated as an Enterprise software company. (This is from my N=1 outside perspective.)
ChatGPT says that "productivity and business processes" is still the largest division in Microsoft with 43% of revenues and 54% of operating income (from their FY2025 10K). The "intelligent cloud" division is second with 38% revenue and 35% operating income. Which helps to support my point -- their legacy enterprise software (and OS) is still their main product line and makes more relative profits than the capital heavy cloud division.