Microsoft's big investment in cloud computing—a large part of its reinvention strategy—could be derailed by concerns about U.S. government snooping and an emerging price war among the big players.
"Microsoft has spent tens of billions on cloud and it's a necessary move in order for them to be a relative player in next generation data center," said Daniel Ives, managing director and senior analyst of FBR Capital Markets. "Cloud is the next big platform and it's the key to their success."
"The whole company and whole product approach is going to be around the cloud," Ives said.
But he added, "one of the impediments of moving to cloud is security and data privacy." Since Edward Snowden's NSA revelations, every CIO at every international company worries intensely about data snooping, and U.S.-based companies are coming under extra scrutiny, Ives said.