Microsoft’s revenue from Azure continues to rise sharply

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Microsoft has reported double-digit revenue growth for Azure for the 14th consecutive quarter. In the past quarter, revenue from this service increased by 98 percent. Revenues from sales of Surface products were virtually flat.

Microsoft’s quarterly figures show that Intelligent Cloud revenue grew 15 percent to $7.8 billion, compared to $6.9 billion in Q3 2017. An important growth engine for this division is Azure, the cloud service from Microsoft that showed a revenue growth of 98 percent. More than a year ago, Microsoft CEO Satya Nadella set a goal of achieving $20 billion in cloud services in revenue, and Microsoft seems on track to make that happen.

The quarterly revenue of the More Personal Computing division increased slightly, by 2 percent, to $12.2 billion. Surface product revenues were up 1 percent and Gaming revenues were up 8 percent. The latter is partly due to a 13 percent increase in sales from the sale of Xbox consoles. Nadella attributes this mainly to the good sales of the Xbox One X, which was released in November last year. There are now 59 million Xbox Live users; that’s an increase of 7 percent.

In the Productivity and Business Processes division, of which Office is a part, turnover increased by 24 percent to 9 billion dollars. Office 365 for the business market accounted for a 41 percent increase in revenue. The number of Office 365 consumer subscriptions rose to 29.2 million, from 28 million in the third quarter of 2017. Windows 10 business OEM license revenue grew 4 percent, but Windows-related business products and cloud services saw a 4 percent decline in revenue.

In total, Microsoft had revenue of $28.9 billion in the last quarter, or the second quarter of fiscal year 2018, an increase of 11 percent from the same quarter a year earlier. In the past quarter, a loss of $6.3 billion was incurred, while a year earlier a profit of almost $6.3 billion was made. This loss was largely attributable to a one-time tax of $13.8 billion. If this cost item based on the US Tax Cuts and Jobs Act had not been included in the figures, the profit would have been $7.5 billion.

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