Microsoft again secures strong revenues with ‘material growth’ in $10m Azure contracts noted

Microsoft has reported revenues of $33.1 billion (£25.7bn) for its most recent quarter, with CEO Satya Nadella emphasising the importance of artificial intelligence (AI) in building out cloud applications.

Writing the headline for Microsoft’s quarterly earnings release requires conforming to some kind of template: ‘Microsoft Cloud [noun] [verb] [quarter] Results’. The noun, usually ‘growth’ or ‘strength’, is optional, as is the word ‘record’ when allowable, while the requisite verb will either be ‘powers’, ‘fuels’, or ‘drives.’

This time round, it is a no-frills “Microsoft Cloud Strength Drives First Quarter Results”, with solid increases across the board. Microsoft’s revenues are placed into three buckets; productivity and business processes, which hit $11 billion (£8.6bn) at a 13.3% increase, intelligent cloud, which was at $10.8bn at a 26.6% yearly increase, and ‘more personal computing’, at $11.1bn representing a 3.6% change. Specific Azure figures are as ever not disclosed, however chief financial officer Amy Hood told analysts there had been ‘material growth’ in the number of $10 million plus contracts in the quarter.

In prepared remarks, Nadella cited the continued growth of Azure powering the rest of Microsoft’s stack – although stopping short of using ‘the world’s computer’, as with the most recent results – yet added a warning. “Organisations today need a distributed computing fabric to meet their real world operational sovereignty and regulatory needs,” said Nadella.

“Every Fortune 500 customer today is on a cloud migration journey, and we are making it faster and easier. We are reimagining customers’ data estates with the cloud era with new limitless capabilities.

“We are accelerating our innovation across the entire technology stack to deliver new value for customers,” Nadella added. “We’re investing aggressively in large markets with significant growth potential, and it’s still early days.”

One area which appears to be gaining traction is through Microsoft 365, the name for the overall suite of ‘productivity cloud’ products. As reported by ZDnet, the company’s ‘Windows commercial products and cloud services revenue growth’ may be the indicator, with that category seeing a particular spike up 26% in Q120 compared to 12% the year before.

“Microsoft 365 is the world’s productivity cloud and the only comprehensive solution that empowers everyone from the C-suite to first line workers with an integrated secure experience on any device,” added Nadella. “We’re infusing AI across Microsoft 365 to help make work more intuitive and natural.”

Microsoft’s highlights from the most recent quarter were varied. The company expanded its cloud data centres to Germany and Switzerland, as well as India, where a major partnership with network operator Reliance Jio was announced in August. Microsoft announced the acquisition of cloud migration tool Movere in September, and most recently secured a partnership with SAP – putting them ahead of their hyperscaler rivals.  

You can read Microsoft’s full results here.

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