Microsoft hails channel as cloud revenue soars

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Microsoft hails channel as cloud revenue soars

Microsoft has announced another bumper quarter after growing revenue by 14 percent to reach US$36.9 billion for its second quarter ended 31 December 2019.

The tech giant is usually picky about which financial figures it breaks out, usually opting to release figures for its three primary product groups: productivity and business processes, intelligent cloud and more personal computing.

Microsoft’s lucrative cloud business overtook productivity in Q2, growing 27 percent to reach US$11.87 billion. The cloud unit includes Microsoft’s Azure services, which grew revenue by 62 percent, while server product revenue rose 30 percent.

Personal computing remained the biggest money-maker for Microsoft despite only growing two  percent, hitting US$13.2 billion. Highlights from the PC business include Windows OEM revenue growing 18 percent, Windows commercial products rising 25 percent and Surface revenue growing six percent.

The PC unit however contained Microsoft’s only business that didn’t grow - Xbox content and services -  which is understandable considering a next-gen Xbox is due later in 2020.

Productivity and business processes, which includes Office 365, LinkedIn and Dynamics also had a stellar quarter, growing 17 percent to US$11.8 billion in sales. In particular, Office Commercial rose 16 percent thanks to Office 365 growing 27 percent while Office Consumer products rose 19 percent.

Dynamics revenue rose 12 percent thanks to Dynamics 365’s 42 percent revenue growth.

Microsoft’s EVP and CFO Amy Hood dropped the only reference to the channel, saying: “Strong execution from our sales teams and partners drove commercial cloud revenue to $12.5 billion, up 39 percent year over year.”

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