Microsoft’s Cloud Drives Fourth Quarter Revenue

Microsoft’s fourth quarter has been a tale of growth and decline, with earnings much higher than expert predictions. Net income reached $5.5 billion while revenue came to $22.6 billion, which is significantly larger than the anticipated $22.1 billion. The driving force behind this massive growth: the cloud.

Microsoft’s intelligent cloud division reported a 7% increase in revenue, boosting it up to $6.7 billion. Microsoft Azure alone grew 102% with cloud services also seeing an increase of 5%. This significant increase in the cloud computing sector is largely due to CEO Satya Nadella, as he poured billions of dollars into growing the cloud and building new data centers around the world as well as partnering and acquiring many companies, including Tigo and GE. In addition, Office 365 saw a 54% increase while Office consumer products and cloud services grew 19%.

However, not all of Microsoft’s sectors experienced growth. The More Personal Computing sector experienced a 4% decline largely due to a 71% decrease in phone sales.

Windows 10 also grew 16%, while Microsoft announced that its plan to have Windows 10 on one billion devices by the year 2018 is unlikely to come to fruition in that short time span,

Microsoft closed its fiscal year with $92 billion in revenue and $22.3 billion in net income.

Previously an industry dominated by Amazon, Microsoft, as well as IBM and Google, are making significant advances with the cloud. This is likely to lead to increased competition within the industry, which will drive steep cloud service prices down.

Comments:

Microsoft CEO Satya Nadella: “The past year was pivotal in both our own transformation and in partnering with our customers who are navigating their own digital transformations. The Microsoft Cloud is seeing significant customer momentum and we’re well positioned to reach new opportunities in the year ahead.”

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