Microsoft has already surpassed $20 billion cloud business goal

Satya Nadella chief executive officer of Microsoft Corp. smiles during the Microsoft Developers Build Conference in Seattle Washington U.S. on Wednesday

Overall revenue increased by 12pc to $24.5bn and operating income was $7.7bn.

CEO Satya Nadella attributed the growth to the commercial cloud business, where the company passed Dollars 20 billion in revenues on an annualised basis, a target first set two years ago.

Azure sales rose 90 percent.

By combining tools from Office 365, Windows 10, and Enterprise Mobility + Security, Microsoft 365 "represents a profound shift in the way we design, build and deliver our productivity solutions, moving to a people-centered approach, spanning all their devices to unlock creativity and inspire teamwork while simplifying security and management", he said. The Office product line, which consists of internet-based versions of Word, Excel and other workplace productivity software, posted sales growth of 42 percent. Wall Street has been concerned about slowing growth with AWS, but it's still growing well.

"The one thing that had been maybe holding the stock back a bit was on the margin front", he said.


Microsoft's Azure revenue nearly doubled and posted 90 percent year over year growth.

Revenue has been patchier in personal-computer software and hardware. The segment declined earlier in 2017 owing to aging Surface Pro products that consumers shunned.

"More personal computing" division of Microsoft had nearly similar revenue compared to previous year at $9.4 billion.

Analysts surveyed by S&P Global Market Intelligence expected Microsoft to report per-share earnings of 72 cents on $23.56 billion in revenue. Global PC shipments fell 3.6 percent in the period, according to Gartner Inc. Productivity revenue, mainly Office software, climbed 28 percent to $8.2 billion. Revenue increased by 12% during the quarter due to strong contributions from the Productivity and Business Processes and Intelligent Cloud segments, while More Personal Computing, which houses Windows revenues, held its ground by reporting flat growth. Microsoft doesn't break out its Azure numbers, but the Canalys research firm estimates it brought in $2 billion, acccording to Reuters.

Gaming revenue was 1% higher at US$1.9bn, although this is expected to jump in the coming quarters as the company prepares to launch its new Xbox One X console in November. Windows OEM revenue went up by just four percent and commercial Windows and cloud services increased by seven percent.

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