Story image

Robust Office 365, Azure push Microsoft revenue, profit up

31 Jan 2017

Microsoft’s cloud push has seen the company beat analysts expectations and post strong results for the second quarter of 2017, with Office 365 and intelligent cloud leading the charge.

The technology giant says its commercial cloud annualised revenue run rate now exceeds US$14 billion.

Overall revenue for the company climbed 1% - or $294 million, with Microsoft reporting global revenue of US$24.1 billion GAAP for the quarter ending December 31, 2016.

Operating income was up 3%, or $151 million on the back of higher gross margin, with Microsoft reporting operating income of $6.2 billion GAAP and net income of $5.2 billion GAAP.

Amy Hood, Microsoft executive vice president and chief financial officer, says the company is seeing strong demand for its cloud-based services and is ‘executing well’ on its long-term growth strategy.

The company’s productivity and business processes segment saw 10% increase to $7.4 billion, as both Office commercial and consumer products and cloud services reported growth.

The vendor says its Office Commercial revenue increased 5% - or US$289 million – thanks to higher revenue from Office 365, which was up 47%, mainly due to growth in subscribers. However, the company noted that that increase was offset in part from products licensed on-premises, highlighting the continuing shift to Office 365 commercial.

Office consumer revenue was up 22%, or $156 million, again on the back of increasing subscriber numbers for Office 365, with subscribers increasing to 24.9 million.

Higher revenue from Dynamics 365 also propelled the Dynamics business upwards, with revenue up 7%.

The Q2 2017 financials also include $228 million in LinkedIn revenue, following Microsoft’s acquisition of the company. That revenue came largely from talent solutions and marketing solutions, Microsoft says.

‘Intelligent cloud’ growth was up to $6.9 billion, an increase of 8%, driven by double-digit annuity revenue growth, Microsoft says.

Azure revenue increased a whopping 93% with Azure compute usage more than doubling year-on-year.

Enterprise services revenue, however, was down 4% as the company saw declines in custom support agreements, but some growth in premier support services and consulting.

On the ‘more personal computing’ side, Windows OEM revenue was up 5%, Windows commercial products and cloud services revenue increased 5% driven by annuity revenue growth; search advertising revenue excluding traffic acquisition costs increased 10% and gaming revenue was down 3% on the back of lower Xbox console revenue, albeit with Xbox software and services revenue seeing growth.

Machine learning is a tool and the bad guys are using it
KPMG NZ’s CIO and ESET’s CTO spoke at a recent cybersecurity conference about how machine learning and data analytics are not to be feared, but used.
Pure Storage expands enterprise data management solutions
It has integrated StorReduce technologies for a cloud-native back up platform, and expanded its data fabric solution for cloud-based applications.
Survey finds DC managers want more efficiency, not horsepower
More servers and more CPU power used to be the answer to boosting data centre performance, but it appears this is no longer the case.
GoCardless to double A/NZ team by end of year
With a successful E round of investment and continuing organic growth globally, the debit network platform company aims to expand its local presence.
Micro Focus acquires Interset to improve predictive analytics
Interset utilises user and entity behavioural analytics (UEBA) and machine learning to give security professionals what they need to execute threat detection analysis.
TechOne bringing solar lights to students in need
The company is partnering with charity SolarBuddy to bring solar-powered lights to children in energy poverty to alleviate study stress after dark.
Universal Robots aims for A/NZ growth with new hire
Peter Hern takes on the role of leading customer support, sales and partner development for Universal Robots in Australia and New Zealand.
CylancePROTECT now available on AWS Marketplace
Customers now have access to CylancePROTECT for AI-driven protection across all Windows, Mac, and Linux (including Amazon Linux) instances.