Microsoft’s commercial cloud revenues break $50bn for first time – but Azure growth slips

James has more than a decade of experience as a tech journalist, writer and editor, and served as Editor in Chief of TechForge Media between 2017 and 2021. James was named as one of the top 20 UK technology influencers by Tyto, and has also been cited by Onalytica, Feedspot and Zsah as an influential cloud computing writer.

Microsoft has reported revenues of $38 billion (£29.9bn) in its most recent quarter, a year over year increase of 13%, but Azure growth has dipped to 47% from 59%.

Azure went up 47% year over year – Microsoft does not give specific Azure figures, only a percentage increase – while commercial cloud revenue topped $50 billion for the year for the first time.

For Microsoft’s three revenue buckets, intelligent cloud – which covers some Azure but with a wider focus on enterprise services – revenue was $13.4 billion, a yearly increase of 17%. Productivity and business processes, which includes Office and LinkedIn, as well as cloud services revenue, hit $11.8bn, up 6%. More personal computing, covering Windows, Surface and Xbox among others, saw a 14% increase to $12.9bn.

Satya Nadella, Microsoft CEO, continued his theme of ‘tech intensity’; the need for enterprise organisations to become technology-centric, and Microsoft’s role in enabling that. “Every organisation today needs a distributed computing fabric to run essential workloads,” he said in an analyst call. “We are building Azure as the world’s computer to support them with more data centre regions than any other provider.”

Among Microsoft’s cloud highlights in the most recent quarter included a $1 billion plan for digital investment in Poland, as well as launching data centre regions in Italy and New Zealand. Microsoft also acquired Metaswitch Networks in May for 5G use cases, building on its buy of Affirmed Networks the previous quarter.

The company saw an impact on its performance due to Covid-19, with its revenue growth forecast lighter than expected. Nadella said at Q3 that the coronavirus had ‘minimal’ net impact on total company revenue. Shares fell as much as 3% in the aftermath of the announcement.

Responding to an analyst question, Nadella noted the change in working traits demanded by Covid-19. “When I think about digital transformation now, I break it into two things,” he said. “I think about resilience and all sorts of what Microsoft can do to help any business be more resilient, whether it’s remote everything, whether it’s about the ability to simulate anything, automate everything.

“You’re going to see lots of ins and outs – but digital technology, and digital transformation itself, is going to be pretty key,” he added. “Therefore we are very focused on sharpening the value proposition of every part of the stack and making sure we adapt for our customers as they navigate these tough times.”

You can take a look at the full financial results here.

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One comment on “Microsoft’s commercial cloud revenues break $50bn for first time – but Azure growth slips

  1. CK on

    Hi, Many peoples had ask the question about Microsoft Azure revenue on quora. This is the very relevant article for Cloud Computing related users.


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