Microsoft reveals cloud growth but $3.2bn net loss in latest financial results


Microsoft has reported a $3.2 billion net loss for the second quarter of 2015, the worst in the company’s history, but backed it up alongside continued strong cloud growth.

It was always going to look nasty. Following the $7.5bn writedown of its Nokia offshoot, the analysts were prepared to sink their teeth into the Redmond giant as its latest financial results came through. Yet Microsoft CEO Satya Nadella was unrepentant, arguing the cloud and mobile gains were pushing the company in the right direction and to consign Nokia to the past.

“We’re seeing proof that preference for our cloud SaaS services creates a flywheel of growth for our cloud platform services,” he said in an analyst call, concluding: “Above all else, I’m optimistic about our future. Our cloud services are accelerating fast and Windows is positioned for renewed growth.”

In all, commercial cloud revenue grew 88% – 96% in constant currency – driven by Office 365, Azure and Dynamics CRM online, while more legacy operations saw a slow decline. Office Commercial products and services, for instance, fell 4% due to “continued transition to Office 365” as well as declining business PCs following the end of support for Windows XP.

Piers Linney, co-CEO of cloud services provider and Microsoft Gold partner Outsourcery, says the uptick in cloud sales justifies his company’s decision to not move to a more vendor-agnostic partner.

“The growth of cloud brought a number of challenges to many of the established players in the industry who have had to rapidly adapt to new business models as a result,” said Linney. “These latest results from Microsoft, while mixed, show that it has held its strong footing in what is a rapidly expanding cloud market.”

He added: “Working with Microsoft enables us to deliver expertise in an offering that is always reliable and best of breed. Microsoft’s latest cloud sales result justifies our decision to remain Microsoft-centric and shows that the strength of Microsoft, and Outsourcery in turn, will only continue.”

Elsewhere, the Redmond firm also announced a major partnership deal with General Electric, moving its 300,000 employees to Office 365. GE chief technology officer Larry Biagini cited continuous iteration and innovation as a key to move to Office 365, alongside the ability to take advantage of as much cloud capability as possible, including Skype for Business and Yammer. The company signed a deal with Box in May last year for content sharing and collaboration services.