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Microsoft Shows Strong Cloud and Server Revenue Growth in Quarterly Results

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In the quarter ending December 31, 2013, Microsoft performed better than analysts had been predicting, reporting revenue of $24.52 billion, a 14-percent increase from the same period last year.

In 2014 Q2, Microsoft’s devices and consumer revenue grew 13 percent to nearly $12 billion, helped by holiday sales of its Xbox One game console and Surface tablet.

But Microsoft’s commercial revenue, which grew an impressive 10 percent to $12.67 billion, serves to highlight the strides the company has made in generating revenue from its cloud and server ventures.

Over the quarter, commercial cloud services revenue more than doubled, and Office 365 commercial seats and the number of Azure customers both grew triple-digits. Also, SQL Server and System Center reported double-digit revenue growth.

Microsoft COO Kevin Turner noted that many customers made significant commitments towards Microsoft’s cloud technologies. “We significantly outpaced enterprise IT spend as we continue to take share from our competitors by delivering the devices and services our customers need as they transition to the cloud,” Turner said in a statement.

As some commenters have pointed out, it would be interesting to know how much of this cloud revenue comes from new customers, and how much comes from existing Microsoft customers switching from traditional solutions to equivalent cloud-based ones. Regardless, this quarter’s earnings numbers make it seem that Microsoft is managing well against its cloud competitors.

In the previous quarter, Microsoft also reported strong revenue growth – most of which happened in the commercial revenue segment, which includes enterprise cloud and server revenue.

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