Azure becomes Microsoft's biggest business - Finance - Cloud

Andrew Cummings
July 23, 2019

Microsoft's commercial cloud solutions continue to drive a major portion of the company's business in 2019, totaling nearly one third of the company's total revenue for the quarter; checking in at $11 billion United States dollars of the companies $33.7 billion USD total revenue for Q4.

Chief Executive Satya Nadella said the results closed out a record fiscal year for the tech giant, which has the largest market value of any company at more than $1 trillion.

As more and more companies are shifting their business processes to cloud computing, the demand for products like Azure will continue to experience growth.

Surface revenue was up in the same quarter a year ago, and it's up once again by 14 percent. The segment rose 14.2 percent to $11.05 billion in revenue, up from $9.67 billion during the same quarter of 2018.

The data from the Windows creator were well received on Wall Street, where Microsoft shares were up 1.44% to $ 138.38 per share in electronic transactions after the closing of the NY switchboards. Having managed the transformation to the cloud infrastructure and services business before being appointed CEO, Nadella doubled down on this transformation as CEO, turning Microsoft's cloud business into an industry-leading powerhouse that generates around $40 billion a year in revenue and billions in profit.

The Cloud Migration Accelerator based on is available on the Microsoft Azure Marketplace as a SaaS offering.

Adding that the Microsoft were getting more and more dependent on its cloud service for revenues and growth, a chief economist for Microsoft shareholder, Capital Investment Counsel, Hal Eddins said, "The pressure was obviously on but they executed".

"Having worked with him for more than 20 years, I know that Satya is the right leader at the right time for Microsoft", said Steve Ballmer, when Nadella was announced as his successor.

Total revenue rose 12% to $33.72 billion, above average analysts' estimates of $32.77 billion.

Microsoft's positive aspects in the past two fiscal years have primarily come from booming growth for its cloud-computing product, Azure, which rivals Inc.'sAMZN, -0.71% Amazon Net Services. GAAP net income during the quarter jumped to $13.19 billion, or $1.71 per diluted share, up from $8.87 billion, or $1.14 per diluted share, during the same period a year earlier.

The segment's overall growth was constrained by a 10-percent drop in gaming revenue, the company said.

Microsofts support for Windows 7 is ending in January 2020, creating opportunities for customers to move over to Windows 10 and to upgrade to Microsofts subscription services.

Xbox Live active users did grow to 65 million in the quarter though, thanks to the wide range of users across Xbox One consoles, Windows 10 PCs, and mobile devices like iOS and Android.

The earnings report had little effect on Microsoft stock.

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