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Microsoft Corporation (MSFT - Analyst Report) recently unveiled a new Internet-based machine learning ("ML") service for its Azure cloud system. Azure ML, as it is called, is the newest demonstration of Microsoft’s investment in machine learning. It will allow developers to swiftly and effortlessly build predictive analytics solutions into applications with data stored in the cloud.

The service will be offered for preview next month and will gradually be rolled out as a completely managed cloud service. Reportedly, the service will be priced at a premium to Azure's regular charges.

Azure ML

Azure ML combines Microsoft’s own software with open source software. It will facilitate big data analytics by harnessing the power of the cloud to develop data-based applications and application programming interfaces (APIs), which in turn will help businesses make better choices.

The new service will bring together machine learning abilities, which have been developed for several Microsoft products including Xbox and Bing. It features visual workflows and predefined templates to help businesses deliver predictive applications more quickly than conventional development processes.

What is Machine Learning?

Machine learning is part of artificial intelligence, which is based on mathematical algorithms and automation. The basic idea is to create analytical models that apply algorithms to automatically analyze and learn from data in a repetitive manner. Thus, the machine learns from the errors in previous computations without human interference to eventually derive reliable, repeatable results.

Machine learning applies historical data to a problem by building a model to successfully forecast future behavior or trends and is currently used in applications like fraud detection, online recommendations and email spam filtering among others. The concept is gaining popularity as more and more companies seek to extract value from collected information.

Growth Prospects

Machine learning is likely to remain a fast-growing field because cloud technology is being increasingly adopted across all businesses, which generates a ton of data in the normal course. If this data can be used to improve efficiencies and drive sales, it automatically becomes an asset. Therefore, we expect that Microsoft’s recent efforts will help to broaden its customer base and boost its top- and bottom-line performances.

However, Azure’s ML will face stiff competition from Amazon.com Inc.'s (AMZN - Analyst Report) Amazon Web Services Cloud Computing Platform and Google Inc.’s (GOOGL) Cloud Platform, which have their personal analytical services and can deploy their data structures in making machine learning algorithms. International Business Machines Corporation (IBM - Analyst Report) is another tech giant that is also keen on using its predictive software in its cloud business.

Microsoft remains one of the best-positioned software vendors, given its wide range of products and emerging markets strength, given the continued technology deployment at data centers and growth in cloud computing. The world’s largest software maker is optimistic about its cloud business and expects it to be a major growth driver in the near future.

Currently, Microsoft has a Zacks Rank #3 (Hold).

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