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Microsoft Takes On Amazon With Azure Orbital Space Service

support@smarteranalyst.com (Ben Mahaney)
·3 mins read

Microsoft is expanding its reach to the space cloud business with the launch of Azure Orbital, a new cloud-based service to connect satellites to its cloud and process data from space.

Microsoft (MSFT) disclosed that the new ground station service will enable satellite operators to communicate with and control their satellites, process geospatial data, and scale operations directly with Microsoft Azure. The ground station as a service offering means that operators can process data from their satellites/spacecrafts on a pay-as-you go basis without needing them to build their own satellite ground stations. With Azure Orbital, the ground segment, including the ground stations, network, and procedures, becomes a digital platform now integrated into Azure and complemented by many partners, the company said.

Microsoft also announced that the tech giant has partnered with satellite companies Amergint, Kratos, KSAT, KubOS, Viasat, US Electrodynamics and Viasat to help bring the service to market as a solution for processing geospatial data.

“The cloud is central to both modern communications scenarios for remote operations and the gathering, processing, and distributing the tremendous amounts of data from space,” said Yves Pitsch, Principal Program Manager of Azure Networking. “Data collected from space to observe Earth is instrumental in helping address global challenges such as climate change and furthering of scientific discovery and innovation.”

Azure Orbital allows satellite operators to schedule contacts with their spacecrafts and directly downlink data into their virtual network (VNet) in Azure. Azure Virtual Networks are isolated, highly secure, and governed by Microsoft's more than 90 compliance certifications covering applications and datasets, the company added.

Microsoft is not alone in the space cloud business. Amazon (AMZN) Web Services’ Ground Station is already offering a very similar fully managed service that “lets you control satellite communications, process data, and scale your operations without having to worry about building or managing your own ground station infrastructure”. The Ground Station includes direct access to AWS services and the AWS Global Infrastructure including a low-latency global fiber network.

Shares in Microsoft have gained about 32% so far this year as the tech giant continues to benefit from increased demand for remote services and cloud solutions during the coronavirus pandemic. (See Microsoft stock analysis on TipRanks)

Following this week’s announcement that Microsoft is snapping up ZeniMax Media for $7.5 billion, Jefferies analyst Brent Thill reiterated a Buy rating on the stock with a $240 price target (16% upside potential).

"Gaming is a strategic pillar for MSFT and it is doubling down on gaming ahead of the pre-sale launch of its new console,” Thill wrote in a note to investors. “This $7.5B deal is MSFT's largest deal in the past two years (Github also $7.5B in 2018) and is also 3x the size of its 2015 acquisition of Minecraft. The acquisition demonstrates MSFT's commitment to first party content as it looks to drive more ratable rev in the segment via gaming pass and xCloud."

The rest of the Street shares Thill’s bullish outlook on the stock. The Strong Buy consensus scores 26 Buy ratings versus 3 Hold ratings. The average price target of $230.38 still implies another 11% upside potential over the coming year.

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Microsoft To Buy Gaming Firm ZeniMax For $7.5 Billion

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