The results that Microsoft announced for the most recent financial quarter show that the software company has taken a major step forward when it comes to its cloud services, as the sales of the Office 365 suite have now eclipsed licenses for its on-premise services for the first ever time.
Microsoft posted year-on-year revenue growth of 13% for the three-month period that ended in June. This period marked the technology firm's fourth financial quarter, as well as its overall financial year-end and brought its total revenue for that quarter to $23.3bn. A significant portion of this growth increase can be attributed to a year-on-year rise in the commercial revenue generated by Office 365. This rose by 43% and helped the Productivity and Business Processes section of Microsoft hit $8.4 billion revenues – a higher total than that for Office products aimed at on-premise use.
During a conference call, Amy Hood, the CFO, confirmed that this was the first occasion that this had happened, and it was not the only good cloud news for the company. Its cloud platform, Azure, saw its overall revenue for this period double – with growth of 97%. Microsoft chose not to supply the precise revenue total for Azure, but did make a point of saying that the total had boosted the growth of the Intelligent Cloud department to the tune of 11%, bringing it to $7.4bn.
Despite being slightly vague about the exact sum brought in by Azure, Hood did emphasise that more Azure deals worth millions of dollars had been sealed during this period than at any time in the past, adding that this had brought its quarterly annualised commercial cloud revenues to more than $18.9bn, which meant growth of 56%. She concluded that Microsoft's commercial cloud revenue for the year was close to $15bn.
The tremendous success that Microsoft is now enjoying with its cloud products such as Office 365 and Azure is the result of its strategy of concentrating on the sale of cloud subscriptions, rather than the Enterprise Agreements of its old on-premise products. This strategy has seen the division of Microsoft called Enterprise Services experience a drop in its revenues of 3% during the same financial period.
call also saw
Satya Nadella, Microsoft CEO, telling the tech media that:
"This quarter's cloud growth puts us squarely on track to reach the goal we set a little over two years ago, of $20 billion in commercial cloud in fiscal year 2018. More than ever before, customers are placing their trust in the Microsoft cloud."
He concluded that businesses were finding Azure to be the best option when it comes to their strategy for the cloud and that the trusted approach, AI features, developer productivity and hybrid consistency of Microsoft had all contributed to this.
This seems like more evidence that the future will be in the cloud for enterprises, which is why it's at the centre of many of our services. Learn all about our business solutions by calling WM Reply today.