And operating profits for the division dropped by 14 percent, in part reflecting non-cloud products included under its umbrella, such as traditional server software. Azure revenue grew 120% in constant currency, Microsoft said, with Azure SQL usage more than doubling.
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“We see that the world is moving to scale computing in data centers”, Jason Waxman, an Intel VP and general manager of the company’s Cloud Platforms Group, said in an interview. Growth in both segments suggestive Microsoft is successfully holding on to customers in its core product lines as they move from the desktop to the cloud. That means customers buying Windows Server to run in their own data centers, may link it to Azure cloud-based services and pay for that access, which would mean future revenue.
For its fourth quarter, Microsoft projected its Productivity and Business Processes revenue at $6.5 billion to $6.7 billion “with continued annuity shift to the cloud, offsetting the impact of a weaker PC market”, Ms. Hood said during a conference call with analysts.
In a few bright spots, the company said sales of its Surface tablet computers rose 56 percent to $1.1 billion, while revenue from ads shown with results from its Bing search engine grew 55 percent to $1.5 billion.
Microsoft has post its third-quarter fiscal results for 2016, and one thing is clear: its phone business isn’t doing so hot.
Office commercial products and cloud services revenue grew 7%, Office consumer products and cloud services revenue grew 6% and Dynamics products and cloud services revenue grew 9%.
Chief Executive Satya Nadella has focused on developing the company’s cloud business with his “mobile first, cloud first” strategy, since taking over in early 2014. Foreign currency exchange rates also affected revenues, the company said, estimating that the overall revenue figure was down approximately $838 million, or 4 percent. Microsoft’s Q3 revenue guidance was $21.1 billion to $22.3 billion.
Many investors gauge Microsoft’s cloud strength by looking at what it calls its commercial cloud, a separate measure that includes cloud businesses such as Azure and Office 365 software.
Microsoft, with this latest Windows 10 Mobile update for the Lumia 950 and 950 XL is now working on a newer, improved solution for improving the battery life of their phones.
Microsoft also is good at playing up its cloud business.
Revenues were down about six percent over the year-earlier quarter, but not as much as has been the case in the first and second quarters, when sales fell 12 percent and 10 percent respectively. This quarter, it came in at $20.5 billion.
Today, Microsoft released a new Windows Insider build, 14328, of Windows 10, featuring a number of improvements to the look and feel of the new Anniversary Edition improvements to the operating system. Windows OEM revenue declined two percent, although that was significantly below the 10 percent contraction in the overall PC hardware market. Last week, Gartner said PC sales fell almost 10% in the first quarter of 2016.
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Office continues to be a steady driver of sales for Microsoft.
