Despite Q2 revenue dip, Microsoft is profiting hugely from cloud

29 Jan 2016

Microsoft CEO Satya Nadella

Microsoft’s GAAP revenues for Q2 fell from $26.4bn last year to $237bn. Despite this, the company’s long-term focus on cloud computing is paying dividends and the company is making more money from cloud than ever before.

The second quarter figures reveal how a significant proportion of the company’s revenues now come from cloud, with commercial cloud revenues exceeding $9.4bn.

Revenue in Productivity and Business Processes declined 2pc to $6.7bn.

The company saw Office 365 revenue increase 70pc with Office 365 consumer subscribers increasing to 20.6m users.

Revenue from Intelligent Cloud grew 5pc to $6.3bn with Server revenues jumping 10pc and Azure revenues up 140pc.

‘Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas’

The company said that more than one-third of Fortune 500 companies are using its Enterprise Mobility Platform.

“Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas,” said Satya Nadella, chief executive officer at Microsoft.

“Businesses are also piloting Windows 10, which will drive deployments beyond 200m active devices.”

Surface grows in popularity but the future of Lumia devices is in doubt

Microsoft also reported that revenues from More Personal Computing declined 5pc to $12.7bn.

Revenue from the company’s Surface devices increased 29pc, driven by the launch of the Surface Pro 4 and the Surface Book.

However, revenue from smartphones was down 49pc, raising fresh questions about Microsoft’s plans for the future of its Lumia devices, which it inherited when it acquired Nokia’s handset business for $7.2bn; an acquisition it acknowledged was a failure.

Xbox Live monthly active users grew 30pc year-over-year to a record 48m users.

“It was a strong holiday season for Microsoft highlighted by Surface and Xbox,” said Kevin Turner, chief operating officer at Microsoft.

“Our commercial business executed well as our sales teams and partners helped customers realise the value of Microsoft’s cloud technologies across Azure, Office 365 and CRM Online.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years