Microsoft Is Up in the Clouds

Microsoft Is Up in the Clouds
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Microsoft reported strong results for the third quarter of its fiscal year 2019, beating analyst expectations across the board. Revenue was up 14 percent to $30.6 billion and net income jumped 19 percent to $8.8 billion, as the company continues to capitalize on its very successful cloud business.

Commercial cloud revenue reached $9.6 billion for the three months ending March 31, putting the poster child of Microsoft’s strategic transformation on an annualized revenue run rate of $38.4 billion. In Q1 2018, the commercial cloud segment had passed an annual revenue run rate of $20 billion for the first time, reaching that milestone ahead of the ambitious timeline Microsoft’s CEO Satya Nadella had set in the spring of 2015.

As the chart shows, Microsoft’s commercial cloud business, consisting of Office 365 commercial, Azure, Dynamics 365 and other cloud properties, has seen blockbuster growth over the past few years. It now accounts for nearly 30 percent of Microsoft’s revenue. Not bad for a business that didn’t exist a couple of years ago.