"In the cloud I would say we absolutely caught the trend. It's no longer about, 'Hey, is Microsoft in the cloud business.' We have a $4.5 billion business that's growing well and it's fantastic to see. It's just that in relation to our success of $70 billion it's a small business. But the overall magnitude of our cloud business today shows that we've caught the trend at the right time, jumped on it with a unique value proposition and we're now further accelerating," he said. "In all of these cases, there will always be some price competition by someone on these various layers. I mean, ultimately there are only two things that I think you compete on. You compete on value, you compete on price. And depending on which layer against which competitor at what time, the equation changes. But our own theory — for example, one of the things that has happened is as we have grown our cloud, especially around infrastructure, one of the things that has grown nicely for us is our server business. It's not, at least in the short term or the intermediate term, zero sum."
Nadella also waved off calls for Microsoft to split its consumer business from its enterprise-focused cloud efforts.
"One of the things that's really been key to our success — the way, even, our footprint in the enterprise grew — is because of what I term as dual-use. People using Windows and Office for their personal use, and taking it to work," he said. "So to us, the way I characterize it is, let's go after the users and their dual use. In fact, I want us to shine, and want to be the best in class around people who are these dual users, who want to use things which are our tools, our platforms for their home as well as work, and it crosses over."