Microsoft gaining on Amazon in cloud

Revenue from the company’s increasingly important “Intelligent Cloud” business, which includes products such as servers and platforms such as Azure cloud infrastructure and services, rose 5 percent to $6.3 billion.

With Lumia sales on the decline and Microsoft’s plan to not produce a large amount of handsets, it’s safe to bet that we’re witnessing the demise of Windows Phone. OEM revenue fell 5% but still came out ahead of a struggling PC market.

Azure revenue skyrocketed 140% in constant currency, with revenue from Azure premium services tripling from one year prior.

Microsoft reported a revenue rise of 2.7 billion U.S. dollars (£1.8bn) on the same period in 2014.

Ives called the progress on Windows 10, with 200 million downloads to date, “eye-popping”.

Microsoft broke down its results into three business units of Productivity and Business Processes, More Personal computing, and Intelligent Cloud. Office commercial products and cloud services revenue grew 5 percent with Office 365 revenue growth of almost 70 percent. Net income was $6.3 billion, with earnings per share of 78 cents, beating Wall Street analyst expectations of 71 cents. The software maker is focusing on its cloud-services segment, which includes services like Azure and was recently broken out into a new reporting segment. The company also posted $25.69 billion in revenue, surpassing analysts’ revenue estimate of $25.26 billion. Conversely Windows Phone revenue dived dramatically, it was cut in half in constant currency, apparently following Microsoft’s cunning plans and “reflecting our strategy change announced in July 2015”.

“It was a strong holiday season for Microsoft, highlighted by Surface and Xbox”, Chief Operating Officer Kevin Turner said in a statement.

‘Our commercial business executed well as our sales teams and partners helped customers realize the value of Microsoft’s cloud technologies’.

Looking at Microsoft’s “More Personal Computing” segment which envelopes all its consumer hardware, a five per cent revenue decline was experienced in FY16 Q2.

Surface’s revenue did dip last quarter, but this time it is up over 29% to $1.35 billion, thanks to the Surface Pro 4 and Surface Book.