M+E Connections

Robust performance in Microsoft’s Intelligent Cloud business again provided a boost for the company’s results in the fourth quarter (ended June 30) as a 40% year-over-year increase in Azure and other cloud services revenue drove a 22% increase in server products and cloud services revenue, the company said July 26.

Intelligent Cloud revenue grew 20% from a year ago to $20.9 billion, while total Microsoft revenue increased 12% to $51.9 billion and net income inched up 2% to $16.7 billion, with earnings per share increasing 3% to $2.23.

The continued Azure growth came as “organizations in every industry continue to choose our cloud to align their IT investments with demand,” Satya Nadella, Microsoft CEO and chairman, told analysts on an earnings call.

“We are seeing larger and longer-term commitments and won a record number of $100 million-plus and $1 billion-plus deals this quarter,” he said.

The company, meanwhile, has “more datacenter regions than any other provider and will launch 10 regions over the next year,” he pointed out.

The new Microsoft Cloud for Sovereignty offering is helping “public sector customers meet urgent compliance, security and privacy requirements,” he also noted.

“With Azure Arc, we’re meeting customers where they are, enabling companies” including General Motors and UBS “run apps across on-prem, edge or multi-cloud environments,” he said.

Microsoft is also continuing to see “more customers move their mission critical workloads to Azure,” he told analysts. For example, American Airlines selected Azure cloud to run its “key operational workloads, including its data warehouse, and Telstra will move its internal IT workloads to Azure,” he said.

Azure is also the “platform of choice for SAP apps on the cloud,” he noted, adding: “Leaders in every industry – including Kraft Heinz, Fujitsu and Unilever –  have migrated” enterprise resource planning (ERP) workloads to Azure.

Last week, Microsoft announced a new service to “accelerate adoption of Oracle workloads on Azure,” he also pointed out, adding: “We are the only public cloud with simplified direct access to Oracle databases running on Oracle Cloud.”

In artificial intelligence (AI) and data, with the Microsoft Intelligent Data Platform, “we provide a complete data fabric, spanning operational databases, analytics and governance, helping customers focus on creating value instead of integrating a fragmented data estate,” he told analysts.

Over 65% of the Fortune 1000 use three or more of Microsoft’s data solutions and “we are growing faster than the market,” he said, noting, “we’re seeing leaders in every industry,” including Lenovo and Walgreens, “unify their data using our tools.”

“When it comes to AI, we are seeing a paradigm shift as the world’s large AI models become powerful platforms themselves,” he said. “With our Azure OpenAI Service, a diverse set of customers, from HSBC, PwC, and RTL Group, to Shell and Wipro, are applying language models to advanced scenarios like content and code generation.”

In gaming, Microsoft has now sold “more consoles life-to-date than any previous generation of Xbox and have been the market leader in North America for three quarters in a row among next-gen consoles,” he went on to say.

Via Microsoft’s Xbox Cloud Gaming service, meanwhile, “we’re bringing games to new endpoints,” he told analysts. For example, “players can now stream Xbox games on Samsung Smart TVs,” he noted.

Microsoft also partnered with Epic Games to make the online game Fortnite available for free via browsers, he said, adding “over 4 million people have streamed the game to date, including over 1 million who were new to our ecosystem.”