Cloud now makes up one third of Microsoft revenues as Azure soars

AzureMicrosoft made $9.4 billion from cloud computing in its last quarter with the 140% rise of Azure revenue surpassing expectations and over shadowing other areas of business.

Yesterday Microsoft released the figures for its quarter ending on December 31, 2015 (Q2 in its 2016 financial year). With total revenues of $25.7 billion, income from cloud computing now represents over a third of its fortune. Microsoft’s stock rose in value by 7% following its earnings announcement.

The latest cloud revenue figures show a $1.2 billion rise on the previous quarter, which saw $8.2 billion revenue on cloud deals. This represents a growth rate of 14.6% every quarter, which suggest that it cloud revenue could surpass its own expectations. Microsoft has previously predicted that its cloud revenue will rise to $20 billion in 2018.

Microsoft CEO Satya Nadella argued that the numbers of businesses that are piloting Windows 10 leads it to expect that it will be installed on over 200 million active devices in the coming year. “Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas,” said Nadella.

The cloud outshone all other areas of the business. While revenue from server based products rose by 10%, Azure revenue grew 140%. Office 365 now has 20.6 million subscribers, which was a major contributor to the success of the sales of Productivity and Business Processes (PBP), which rose to $6.7 billion in value, from $6.3 billion in the last quarter. The service revenue from the Intelligent Cloud (IC), grew from $5.9 billion to $6.4 billion over the same period.

Sales in the More Personal Computing category, taking in Windows, Devices, Gaming and Search, went from $9.4 billion to $12.7 billion, a rise of 25.9%, even in the teeth of a 49% fall in phone revenues. Meanwhile, Microsoft reported that its success in monetizing its search advertising had grown by 29%, which it attributed to the integration of search into Windows 10.

Microsoft returned $6.5 billion to shareholders in dividends.