The steady growth was fuelled largely by Microsoft Azure, the software giant's cloud-computing services division, which saw a revenue growth of 93 percent. Investors should also be pleased to note that this innovation hasn't hurt the company's bottom line. So I am betting that we'll see a reporting change beginning in the next fiscal year.
Microsoft's success reinforces a clear overall trend towards the cloud from corporate users. Good news is Microsoft still has plenty of time in the year to announce new products, some of which could possibly be a new Surface Studio 2, Surface Pro 5 or Surface Laptop 2. Microsoft's strategies across the board are paying off, and in a big way. And that product now has over 135 million active users. Google was ranked third, up 89 percent to United States dollars 1.2 billion.
However, the biggest surprise in the quarterly earning comes from Surface and Xbox revenues.
In sharp contrast to LinkedIn, Microsoft's transition from on-premises office productivity software to cloud-based subscription office productivity services seems to be working. Microsoft's own revenue forecast had been $25.25 billion to $25.95 billion. But if you look closely at Microsoft's numbers, you can see that it loses roughly $250 million every single quarter and always has.
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Overall revenue, which includes sales from Whole Foods, increased 43% year-over-year. "One of the key things is, architecturally, the way we build Azure, the way we build Office 365, the way we build our gaming cloud and the way we build even Dynamics, are all on one architecture", said Nadella. That revenue is almost double that of the number two, Microsoft, (up 93 per cent), which is growing much faster than AWS but from a lower base. Its net profit was roughly $7.4 billion, up from almost $5.5 billion during the year-ago quarter. Nadella's cloud-centric campaign has included a major re-org of Microsoft's business units to focus on cloud services.
Revenue in the Productivity and Business Processes segment was up 17% from the same period in 2017, hitting the $9 billion mark.
Office commercial products and Cloud services revenue increased 14 per cent-driven by Office 365 commercial revenue growth of 42 per cent.