A few days back, Microsoft made an announcement regarding its latest earnings, which revealed the status of Microsoft’s steady and strong health. Here is what the analysis looks like:
The rising prominence of cloud makes it a critical platform for businesses. Though Microsoft earns a huge revenue from the sale of packaged applications like Office, the role of Cloud is pivotal to Microsoft’s enterprise customers. Microsoft’s Commercial Cloud revenue has grown to almost 60%. This figure explicitly indicates that Microsoft is on a transition path to become a strong cloud entity and the growth is likely to continue for the coming years.
Another area is Azure that has witnessed a soaring revenue of 94%. The giant is well able to throw up a strong competition to its rivals like Google cloud and AWS. With Azure, Microsoft facilitates the smooth transition of its business clients to cloud-based applications. Azure has considerably expanded the comfort of its long-term fans by offering the security and operational flexibility. In addition to this, there are products like Dynamics that also contributes dearly to Microsoft’s revenue.
One of the most beautiful feathers on Microsoft’s cap is its Office 365, which is one of the major determinants of Microsoft’s revenue. Office 365 indicates an excellent growth rate of 47% in commercial space and 22% in consumer space. From a device-installed Office app to a recurring online service, Office 365 tremendously supports customers. It is interesting to note that many Office users even tried using Google’s G Suite and switched back to Office.
Windows 10 momentum is continuing in 2017 with many enterprises (especially large commercial enterprises) migrating to the platform. Nevertheless, it will take some time for businesses to achieve a full level of migration. Another reason behind the growth of Microsoft’s cloud revenues is the fact that many companies are moving to cloud based apps instead of their own server farms- Yes, Windows Commercial Server License sales are slow. However, the shift to Office 365 and other productivity products like Skype, Dynamics etc. will continue to mount over the years.
Though Microsoft seems to be not very ambitious about mobile OS, Windows on mobile is not a major loss for the giant. Microsoft is trying to expand its mobile-driven products and services by offering them on iOS and Android based phones. In the hardware market, Microsoft is holding its grip tightly with products like Surface, Surface Pro, Surface Studio, Surface Hub etc.
The future of Microsoft is definitely around Cloud. Microsoft’s acquisition of LinkedIn and other productive offerings including Office 365, Skype, Dynamics and more pave the road to shifting from Microsoft to Microcloud. Satya Nadella and his team is setting on the sails perfectly amidst the choppy waves.
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