Microsoft Q2 impresses after cloud forms a pretty picture

27 Jan 2017

Microsoft. Image: Volodymyr Kyrylyuk/Shutterstock

LinkedIn and Azure each played a part in Microsoft’s Q2 results beating forecasts, with $24.1bn in revenues and $5.2bn in net income proving that times are good at the company.

Satya Nadella’s reign as Microsoft CEO has seen the tech giant shift more and more of its focus towards cloud services, an ethos that has proved quite profitable indeed.

In the company’s Q2 results, its Azure platform showed revenue returns jumped by an emphatic 93pc in just one quarter, after doubling in Q1.

Cloudy day

Meanwhile, the $26bn purchase of LinkedIn, which officially went through in December, brought $228m in revenues into Microsoft’s books, with a net loss of $100m for the period.

‘Intelligent Cloud’ revenues are up 8pc to $6.9bn, with the company’s productivity and business process (Office) up 10pc, to $7.4bn.

“I am pleased with our results this quarter. We see strong demand for our cloud-based services and are executing well on our long-term growth strategy,” said Amy Hood, executive vice-president and chief financial officer at Microsoft.

“Our customers are seeing greater value and opportunity as we partner with them through their digital transformation,” said Nadella. “Accelerating advancements in AI across our platforms and services will provide further opportunity to drive growth in the Microsoft Cloud.”

Xbox revenues dropped 3pc on this time last year, though Microsoft’s spin is that a larger slowdown in console revenues was nearly offset by software and services.


In other news, a US appeals court has upheld a verdict that bars the US government from forcing Microsoft to hand over emails stored on servers at its data centres in Dublin.

An equally divided federal appeals court in New York voted 4-4, with three judges recusing themselves from the decision, refusing to reconsider an appeal that forbids the government from forcing the tech giant to disclose its emails stored on servers outside the US.

The decision upholds a 14 July decision that was seen as a victory for Microsoft and privacy advocates.

At the same time, another dispute between the company and the US government is unfolding, as Microsoft fights to remove gag orders on when and why it must transfer data to the state.

Under antiquated laws, Microsoft claims the US government “has exploited the transition to cloud computing as a means of expanding its power to conduct secret investigations”.

Microsoft. Image: Volodymyr Kyrylyuk/Shutterstock

Gordon Hunt was a journalist with Silicon Republic