Microsoft Cloud Push Gains Ground on Azure, Office 365

Microsoft Cloud Push Gains Ground on Azure, Office 365

Microsoft hit its $20 billion commercial cloud annual revenue run rate target and delivered better-than-expected first quarter results. Office commercial products and cloud services grew by 10% (10% in CC), including an increase for Office 365 commercial by 42% (42% in CC), and a 17% (17% in CC) decline in Office commercial products. This includes the Azure cloud, subscriptions of Office 365, as well as Dynamic 365 apps for customer relationship management and enterprise resource planning.

Three quarters before a self-imposed deadline to achieve $20 billion in annualized revenue from its commercial cloud products and services, Microsoft announced Thursday that it had achieved that goal. Gaming revenue, however, only increased 1 percent, even as Xbox software and services revenue was up 21 percent.

"Our strong start to the fiscal year reflects the impact of our continued investment in product innovation and sales capacity to capture expanding market opportunities", said Amy Hood, executive vice president and chief financial officer at Microsoft.

The milestone was announced in Microsoft's earnings release this afternoon, where it reported $24.5 billion and a profit of $6.6 billion, up from $20.4 billion and $4.7 billion this same quarter a year ago.

LinkedIn reported revenue of $1.1 billion in the previous quarter and it once again came in at exactly the same number.

Microsoft predicts that it will bring in 83 cents per share in earnings for its current quarter on an adjusted basis.

As you can see from the image above, the biggest areas of growth, in terms of percentage, are Azure, Dynamics 365, and Office 365 commercial.

More Personal Computing: Revenue was $9.4B and down 1% in constant currency.

Revenue was $24.5 billion and increased 12%.

Surface revenue finally saw some growth, as it had been declining for a while due to the lack of new hardware.

Surface revenue increased by 12 percent driven by sales of the new Surface Laptop.

Looking at Microsoft's past year, the company pushed heavily on its cloud business, including Microsoft Azure - which saw a revenue rise of 97 percent year-over-year last quarter.