Microsoft celebrates 62% Azure revenue growth

The company continues to make gains on rival Amazon Web Services

Revenue from Microsoft’s Azure cloud offering grew by 62% in the last three months of 2019, according to the company’s most recent earnings report. 

The company’s overarching intelligent cloud service – consisting of Azure and Enterprise Services – garnered $11.9 billion (£9.2 billion) in revenue last quarter, nearly a third of the its total figure of $36.9 billion (£28.3 billion).

Advertisement - Article continues below

Among its three operating groups, Microsoft’s cloud services experienced the most significant growth, with revenue increasing 27%. Revenue in its business and productivity division, which includes LinkedIn, rose 17% to a total of $11.8 billion (£9.1 billion). Personal computing earned $13.2 billion (£10.2 billion) – only a 2% increase from the prior quarter. 

Raymond James investment banking analyst Michael Turits credited Azure’s innovation and software updates for Microsoft’s quarterly success.

“Our Microsoft checks were strong this quarter, with the biggest improvement from resellers that were seeing an uptick in Office 365 E3 to E5 conversions, on increased interest in collaboration and integration of Microsoft Teams, and from security including EMS, Azure Active Directory and Azure Sentinel,” he said in a note to clients, as reported by Seeking Alpha

For years Azure has maintained consistent, upward revenue growth rates: its worst performing fiscal quarter in recent memory occurred between July and September 2019 (the company’s first fiscal quarter of 2020). Within this period however, the cloud service’s revenue still managed to jump 59%.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

Although Azure is one of the fastest growing cloud computing services, Amazon Web Services (AWS) dominates the field, controlling roughly a third of the cloud infrastructure market. Last quarter, AWS revenue alone grew 34%, according to Amazon’s most recent quarterly release.

Google Cloud trails far behind both Azure and AWS, although it is growing. In its first-ever public cloud revenue release, Alphabet reported Google Cloud’s revenue increased 53% last quarter, hitting $2.6 billion. 

Even though AWS prevails over both Azure and Google Cloud in terms of market share, it lags in profitability. Its revenue in calendar 2019 was $35 billion (£26.9 billion) in comparison to Microsoft’s $44.7 billion (£34.4 billion) – a 27.7% disparity in favor of Azure.

Featured Resources

The case for a marketing content hub

Transform your digital marketing to deliver customer expectations

Download now

Fast, flexible and compliant e-signatures for global businesses

Be at the forefront of digital transformation with electronic signatures

Download now

Why CEOS should care about the move to SAP S/4HANA

And how they can accelerate business value

Download now

IT faces new security challenges in the wake of COVID-19

Beat the crisis by learning how to secure your network

Download now
Advertisement

Recommended

Visit/microsoft-azure/34748/meet-azure-arc-a-microsoft-platform-for-those-that-want-a-bit-of-everything
Microsoft Azure

Meet Azure Arc, a platform to simplify deployment management

4 Nov 2019

Most Popular

Visit/operating-systems/microsoft-windows/355812/microsoft-warns-against-installing-windows-10-may-2020
Microsoft Windows

Microsoft warns users not to install Windows 10's May update

28 May 2020
Visit/security/data-breaches/355777/easyjet-faces-class-action-lawsuit-over-data-breach
data breaches

EasyJet faces class-action lawsuit over data breach

26 May 2020
Visit/security/cyber-security/355797/microsoft-bans-trend-micros-rootkit-buster-from-windows-10
cyber security

Microsoft bans Trend Micro driver from Windows 10 for "cheating" hardware tests

27 May 2020