Microsoft Cloud Grows Bigger But Still Not The Biggest

Microsoft missed the industry bandwagon shift to mobile, and its latest forecast has seen its profit margin fall by 15%, but strong growth and a relentless push toward Cloud services has seen the Redstone based company share price soar.

Microsoft’s cloud business, which includes products such as its Azure cloud infrastructure and Office 365, is set to top $9 billion in annual revenue according chief executive Satya Nadella. One analyst told the BBC that:

“People who think Microsoft is sliding into irrelevancy really need to re-evaluate how they see the company. They are a software-first company in a world that is increasingly about software.”

While revenue from Windows OEM decreased despite the widely acknowledged success of Windows 10 over the last 7 months or so, the number of Office 365 users increased to 20.6 million users, and Azure grew by over 140%. A statement from Microsoft pointed out that over one third of Fortune 500 companies now use Microsoft’s Enterprise Mobility solutions.

“Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas,” said Nadella. “Businesses are also piloting Windows 10, which will drive deployments beyond 200 million active devices.”

The growth in cloud based computing, the rise of Web Apps, and the idea of “Content as a Service” is proving to be a major factor in the way the tech industry has focused its efforts in recent times.  Cisco have estimated that 83% of all its data center traffic will come via the cloud by 2019.

Despite Microsoft’s positive numbers, Amazon Web Services, which started as long shot experiment back in 2006, is furthest ahead in the digital fight for cloud users.  It has 27.2% of the market to Microsoft’s 16.2%, while Google surprisingly sits on a lowly 3.6%.

Kevin Turner, COO at Microsoft said:

 “It was a strong holiday season for Microsoft, highlighted by Surface and Xbox. Our commercial business executed well, as our sales teams and partners helped customers realize the value of Microsoft’s cloud technologies across Azure, Office 365 and CRM Online.”