Microsoft has had yet another record quarter with its cloud services leading the way as more and more people switch to remote and hybrid work during the pandemic.
The software giant’s revenue stood at a whopping $51.7bn, 20pc higher than it was in the same quarter last year. Microsoft also beat analyst expectations of revenue by $1bn, according to FactSet figures reported by The Wall Street Journal.
Microsoft’s overall cloud revenue was $22.1bn, up 32pc over the previous year’s quarter. According to Amy Hood, chief financial officer, this was driven by the strong performance of its cloud service Azure, which grew by 46pc after demand across many sectors.
Satya Nadella, chief executive of Microsoft, told investors in an earnings call yesterday (25 January) that “we’re living through a generational shift in our economy and society” as the pandemic has disrupted the way people live and work – spearheaded by technology.
“As tech as a percentage of global GDP continues to increase, we are innovating and investing across diverse and growing markets, with a common underlying technology stack and an operating model that reinforces a common strategy, culture and sense of purpose,” he said.
Teams surpassed 270m monthly active users for the first time, indicating a strong demand for digital means to run businesses and collaborate within organisations as hybrid work takes hold.
Nadella said that services such as Teams Rooms and Mesh will enhance the way people communicate with each other in the virtual workplace platform, with Mesh “brining the metaverse to Teams” – helping employees share unprecedented immersive experiences.
He added that more than 90pc of Fortune 500 companies used Teams Phone this quarter, an indication that the platform is “rapidly becoming the standard for unified communications”.
Ioan MacRae, chief executive of Maintel, called Azure the ‘golden goose’ of Microsoft as cloud becomes increasingly important to the success of Big Tech. “Microsoft’s Teams and Azure offerings are expected to remain central to how many businesses now operate,” he said.
“Teams can support calls, emails, video conferencing, document sharing and chat all in one place. Very few apps provide a similar one-stop-shop approach, which is a key reason for its success.”
Windows and PC demand was also up, and Nadella said he was “delighted” by the response to Windows 11 which was released in October. There are now more than 1.4bn monthly active devices running Windows 10 or 11, with users of the latter engaging with the Windows app store nearly three times more than those who use Windows 10.
LinkedIn saw perhaps some of the most impressive growth this quarter, with revenue up 37pc as the labour market experiences a “great reshuffle”. Confirmed hires were up 110pc and more than 24,000 events were created each week.
“In this new economy, LinkedIn has become mission critical to connect creators with their communities, job seekers with employers, learners with skills, and sellers with buyers,” said Nadella.
Meanwhile, with Microsoft’s recent $69bn acquisition of Activision, the gaming company has announced it will release at least three of the next games in the Call of Duty franchise on the PlayStation – an Xbox rival. Microsoft reported record engagement in its gaming services this quarter.
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