This unit includes Azure and server products.
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Revenue in Microsoft’s “intelligent cloud”, which includes a range of services for the enterprise, rose eight percent. Microsoft estimates the Facebook-for-suits operation brought $228m in revenues, but ended up with a net loss of $100m due to intangible asset write-offs.
The recent strength of the US dollar is obvious.in some results. The “Productivity and Business Processes” segment showed 10% increase in revenue, amounting to $7.4 billion. “Office 365 may come to be the cloud’s reigning killer app”.
Augmented and virtual reality are growing into multi-billion-dollar businesses that will transform how users shop, work and communicate. Research firm IDC, for example, pegged global PC shipments during the December quarter at 70.2 million, down 1.5% from the year prior. StaffHub, a technology launched this month to schedule shifts for “deskless workers”, will help drive that goal, Nadella said. Sangara Narayanan, writing for GuruFocus.com earlier this week, said: “For now and for the foreseeable future, Amazon’s AWS gets to keep the IaaS crown despite aggressive moves from Microsoft and IBM to expand their own cloud revenues in their own unique ways”.
While Alphabet’s “other bets” are still losing money, revenue from segment increased by 75% year-over-year, climbing to $262m for the quarter.
“Server products and cloud services revenue increased 12 per cent (up 14 per cent in constant currency) driven by double-digit annuity revenue growth”.
Revenue from the company’s “intelligent cloud” unit reached $6.9 billion, up 8% for the quarter. In 11 of those quarters, Microsoft topped analyst revenue estimates.
Raymond James’s Michael Turits, reiterating a Strong Buy rating, and raising his price target to $73 from $69, writing that “A combination of continued strong cloud growth and stability in the on-premise business suggest Microsoft’s transition to cloud should remain on track”. Additionally, “Azure Premium revenue grew triple digits for the 10th consecutive quarter, and more than three out of four Azure customers are using Premium Services”, Nadella notes.
Office 365 has now added less than 1 million subscribers for three quarters in a row.
As if we did not already know it, these numbers confirm one thing. In cloud this quarter, Azure grew a strong 95% cc and commercial Office 365 was up 49%.
Despite Surface Phone rumors that never seem to die, Windows Phones like the Lumia 950 and 950 XL have failed to moved the needle the way Microsoft always hoped they would. There is only one direction now and that is up.
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In July 2016, Gartner predicted more than $1tn in IT spending will be directly or indirectly targeted away from traditional IT delivery models and to the cloud between now and the year 2020. Available in PDF and EPUB formats (suitable for iBooks) or for Amazon Kindle.
