However, the good performance of cloud was overshadowed by the continued failure of Windows Phones to get any traction in the market, with only 4.5m devices sold.
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In fact, sales figures for Microsoft’s flagging smartphone brand are down by more than half compared to this time past year. Analysts don’t expect Microsoft to see revenue from Windows 10 until later this year.
Office 365, the company’s subscription-based productivity service also saw a revenue growth of 70%, with subscribers increasing to more than 20 million. The service revenue from the Intelligent Cloud (IC), grew from $5.9 billion to $6.4 billion over the same period.
Microsoft revenue in Productivity and Business Processes was $6.7 billion (-2 percent).
“The enterprise cloud opportunity is massive, larger than any market we have ever participated in”, Mr Nadella said in a conference call.
Revenue in Microsoft’s closely watched Intelligent Cloud segment grew by 5% to $6.3 billion.
The More Personal Computing division was also down 5% from last quarter.
“Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas”, Satya Nadella, Microsoft’s CEO said in a statement.
The 8 per cent non-GAAP profit rise on last year’s results has left investors pleased, with shares up a similar 8 per cent on the news.
Today, Microsoft announced its fiscal Q2 2016 results, noting that it earned $6.3 billion United States dollars in net income and $25.7 billion USD in revenue in the three months ending December 31st, 2015. Search advertising revenue was up by 21 per cent in constant currency. In line with that, Microsoft’s revenue from personal computing, which includes its Windows operating system, fell 5% in the fourth quarter to $12.7bn.
It was a strong holiday season for Microsoft highlighted by Surface and Xbox.
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The company’s traditional PC sales business continues to lose business, alongside phone revenue, which has similarly fallen with the revenue stream declining 49%. Surface revenue jumped 29% in constant currency, driven by the launch of two new tablets, the Surface Pro 4 and Surface Book.
