Microsoft commercial cloud sales surpass $50bn for 1st time in FY20


In the previous quarter, Microsoft said that "COVID-19 had minimal net impact on the total company revenue".

"In our per-user business, growth continued to moderate, given the size of our enterprise mobility installed base, which grew 26 per cent to over 147 million seats", he informed.

One-time purchases of software have also been curtailed, which caused the company's Productivity software unit to fall slightly short. Unlike tech giants Google and Facebook, Microsoft does not generate the majority of its revenue from advertising and thus may weather the pandemic better. The company thus easily beat expectations.

Microsoft's stock price dropped by 3% in after hours trading.

For Microsoft's fiscal Q4, net income fell to $11.2 billion, or $1.46 per diluted share, from $13.19 billion, or $1.71 per diluted share, during the same period a year earlier.

Prior to the pandemic, "I don't think digital tech, as being key to business resilience, was the No. 1 priority" for most companies, Nadella said.

Microsoft's revenue from Azure had jumped 59% in the third quarter.

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The COVID-19 pandemic and shift to work-from-home is turning out to be "another catalyst driving Azure/Office 365 growth", wrote Daniel Ives, managing director for equity research at Wedbush Securities, in a note to investors on Wednesday. "The demand for further cloud usage and services will continue, so this growth could accelerate even further, especially as it becomes more and more apparent now that the companies with the most integrated, modern and resilient technology stacks are those that will bounce back the fastest from any economic hardship or future shutdowns".

Microsoft ongoing to see strong advancement in businesses like Office environment 365, Microsoft Azure, Windows, and Xbox, as stay-at-house orders nationwide direct to heightened demand from customers for both distant function equipment and movie video games. Microsoft does not break out exact Azure revenue numbers, likely to avoid comparisons with industry leader AWS. Yesterday, LinkedIn announced it would cut about 960 jobs, or 6% of its global workforce. Also, earlier this week, Microsoft released the personal version of Teams for subscribers to Microsoft 365.

Microsoft said Teams has been a success during the pandemic, but the product has drawn scrutiny from competitors.

The device - which is termed "Productivity and Business Procedures" and consists of Business products for corporations and customers, LinkedIn revenue and Dynamics items and cloud providers - arrived at $11.75 billion in Q4, missing estimates of $11.9 billion. Analysts on average had expected cloud revenue of $13.09 billion.

Office Consumer products and cloud services revenue increased 6%.

In Q4, solid cloud growth helped boost group sales by 13%, year-on-year, to a shade over $38 billion.

As part of its financial report for the fourth quarter of its fiscal 2020, ended June 30, Microsoft on Wednesday reported major growth in cloud products, alongside a "slowdown in transactional licensing" in its Office, server and Windows product lines.