Microsoft sees it all come together in financials as Azure revenues go up 89% year on year

It’s becoming a rather shop-worn tale – but for another quarter, Microsoft has cited cloud success as key to its financial results.

And why not? For Q418, Microsoft posted revenues of $30.1 billion (£23.1bn), an increase of 17% on this time last year. Total revenue for the year was $110.4bn, an uptick of 14% on 2017. For the various buckets into which Microsoft divulges its revenues, ‘intelligent cloud’ was at $9.6bn – up from $7.8bn the previous year – while ‘productivity and business processes’ saw a 13% rise to $9.7bn.

As ever, Microsoft does not disclose revenues for individual products, but instead gives a ballpark figure of their improvement. Azure was the big winner, going up 89% year over year, while revenue in server products and cloud services – a part of the ‘intelligent cloud’ bucket – went up 26%. LinkedIn revenues went up 37% year on year, with sessions growth rising 41%, while Office commercial products and cloud services revenue went up 10%.

Fielding an analyst question in the earnings call, CEO Satya Nadella said there were a variety of accelerants for Azure, from AI services requiring storage and data, to tier one workloads.

“Our hybrid value proposition really has continued to resonate,” said Nadella. “So that means there’s a bunch of workloads that are migrating to the cloud – people use Azure Stack plus Azure. So that continues to drive a lot of IaaS growth for us as people are looking basically to lift and shift a lot of their current data centre workloads.”

Nadella added in prepared remarks that the results reflected his vision towards an intelligent cloud and intelligent edge, from team reorganisation to product execution.

“Our opportunity has never been greater,” he said. “We will continue to innovate and invest across our solution areas in serving our customers and their unmet and unarticulated needs.

“With this tremendous opportunity comes great responsibility. We’re relentlessly working to instil trust in technology across everything we do.”

Highlights for Microsoft in the most recent quarter included data centre expansion, first in Germany, Switzerland and the United Arab Emirates, as well as Australia and New Zealand, as well as the general launch of Azure Kubernetes Services (AKS). Most recently, Walmart signed a five year strategic deal to use many of Microsoft’s cloud services.

You can take a look at Microsoft’s full financial report here.

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