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Microsoft Corp (MSFT - Free Report) has acquired container technology specialist, Deis for an undisclosed amount. The acquisition will help it boost Azure Cloud’s ability to run containerized workloads.

Per a blog post, Scott Guthrie, Microsoft’s Executive Vice President, Cloud and Enterprise Group, said “Containers have been at the forefront of cloud transformation in recent years, and for good reason: Container technologies let organizations more easily build, deploy and move applications to and from the cloud.” He further added that Deis will give “developers the means to vastly improve application agility, efficiency and reliability through their Kubernetes container management technologies.”

Kubernetes is an open source system, designed by Alphabet’s (GOOGL - Free Report) Google, to help in automation of deployment, scaling, and management of containerized applications.

With Satya Nadella at the helm, Microsoft remains focused on its “cloud first, mobile first” motto and the recent announcement is another step in that direction. During the last few months, Microsoft joined the Linux Foundation and announced a new Azure partnership with Open AI, which could once again drive Azure adoptions by clients. 

As per an IDC report, worldwide spending on public cloud is estimated to reach a whopping $203.4 billion by 2020 at a CAGR of 21.5%. We hope that Microsoft’s increasing collaborations with open source providers will help it become a dominant player in the long run.

However, we note that competition is fierce in the cloud space with the presence of other major players such as Amazon’s(AMZN - Free Report) AWS, IBM Corp’s (IBM - Free Report) IBM Cloud and Google Cloud Platform.

At present, Microsoft carries a Zacks Rank #4 (Sell). Shares of the company underperformed the Zacks Computer – Software industry over the last one year. While the industry gained 21.6%, the stock registered growth of 20.7%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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