On a conference call with analysts, Microsoft CEO Satya Nadella said the company is making progress in its shift to cloud computing.
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Wall Street was looking for first quarter earnings of 59 cents a share on revenue of $21.03 billion. Office 365 consumer subscribers increased by 3m users to 18.2m users.
This quarter also marked a change for how Microsoft reports earnings. Just ask Hewlett-Packard, that launched an ambitious push into public clouds with HP Helion but shut down operations earlier today since it couldn’t support the shared networking and massive storage infrastructure required to compete with Amazon, Microsoft and Google.
Windows OEM revenue declined 6 percent, though Microsoft noted this is still better than the overall PC market. “We have worked for years with Microsoft on Windows and Office, and we’ll always help customers with a variety of other systems and platforms”, he added.
Microsoft’s revenue was down during the first quarter of its 2016 fiscal year, the company reported today in an earnings release. Microsoft shares surged in after-hours trades, climbing as much as 5.77% to $50.80 per share.
Revenue in Productivity and Business Processes declined 3% (up 4% in constant currency) to $6.3 billion, revenue in Intelligent Cloud grew 8% (up 14% in constant currency) to $5.9 billion and revenue in More Personal Computing declined 17% (down 13% in constant currency) to $9.4 billion.
David Lavenda, VP of product strategy at Microsoft partner harmon.ie, sees Redmond’s big switch towards Office 365 “spot on”.
“We’re seeing great traction with businesses who want to bring Microsoft’s cloud, mobile device management technology and data analytics together to improve security and productivity resulting in nearly 70 percent year-over-year growth in our commercial cloud run rate”, operating chief Kevin Turner said in a statement.
Revenue of around $US21.09 billion.
The Intelligent Cloud segment includes results from public, private and hybrid server products and services such as Windows Server, SQL Server, System Center, Azure, and Enterprise Services. It should be no surprise that, pushed aside under Nadella, Microsoft’s phone revenue is tanking, falling 54 percent year over year.
The More Personal Computing segment includes Windows operating system licensing revenue, hardware such as Surface tablets and Lumia phones, Xbox consoles and video games, and Bing search.
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“Michael talked about all the other things that he will do along with EMC but we believe that by providing the choice that speaks to the realities of our customers, we will not only drive our partnership and our success but, more importantly, address the needs of our customers”, he said.
