Microsoft Teams' 115 million daily users helped power vendor's ‘strong’ Q1

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Microsoft Teams' 115 million daily users helped power vendor's ‘strong’ Q1

Microsoft’s Teams collaboration app continued a stunning pace of user growth even beyond the initial shift to remote work and learning earlier this year, helping to bolster an expectations-beating fiscal first quarter for the tech giant.

The total for daily active users of Teams now stands at 115 million, Microsoft CEO Satya Nadella disclosed on Tuesday. That’s an increase of 53 percent from the last time Microsoft shared the figure, in late April, when Teams daily active users had reached 75 million.

“As companies move online, they also want one unified platform--from meetings to phone systems--which Teams delivers,” Nadella said Tuesday during a quarterly earnings call with analysts.

Teams is “exciting” because it’s “like a shell” for so many key workplace capabilities, he said.

“It’s meetings, it’s chat, it’s collaboration, as well as business process applications--[all] integrated into Teams,” Nadella said.

Along with huge user growth, “we’re also seeing significant growth of usage across all of these modalities inside of Teams,” he said.

Teams has now seen its daily active user base more than triple since 11 March, much of it driven by the COVID-19 pandemic and resulting move to working and learning from home.

The boom in Teams usage has created major opportunities for solution providers, said Ric Opal, principal and national GTM and strategic partnerships leader at BDO Digital.

“Teams is a fantastic platform. But when you deploy it and you don’t think about compliance, and you don‘t think about risk, and you don’t think about regulatory impact--then there’s an opportunity to go assess those environments,” Opal said. “For Microsoft partners in general, there are opportunities to go back and look at things that maybe weren’t cared for properly when people raced to get remote--such as governance, compliance, cybersecurity.”

Growth from Office 365 was among the highlights of Microsoft’s fiscal first quarter 2021, ended 30 September. Office 365 Commercial revenue grew 21 percent during the quarter--contributing to 11 percent growth in Microsoft’s Productivity and Business Processes segment, which reached US$12.32 billion during the fiscal Q1.

Overall, Nadella said the first-quarter results show that Microsoft is “off to a strong start in fiscal 2021, driven by the continued strength of our commercial cloud.”

Microsoft’s quarterly revenue on the whole jumped 12 percent to US$37.15 billion, from the same period a year earlier, compared to the US$35.72 billion that a consensus of analysts had forecast.

Net income reached US$13.89 billion, or US$1.82 per diluted share--well above the analyst consensus estimate of US$1.54 per diluted share. Net income had been US$10.68 billion, or US$1.24 per diluted share, during the same period the year before.

Microsoft reported that Azure revenue surged 48 percent during its fiscal first quarter, year over year. The company’s Intelligent Cloud segment was Microsoft’s largest business during the quarter, pulling in revenue of $12.99 billion--up 20 percent from the year before.

Nadella suggested during the call Tuesday that Microsoft is still just getting started with the Azure opportunity--as distributed cloud infrastructure becomes even more essential for modernizing existing applications and creating new ones.

“If you add those up, I think that we are still in early innings,” Nadella said.

Microsoft’s personal computing segment also grew during the company’s fiscal Q1, though more modestly than its other two segments--rising 6 percent from a year earlier, to US$11.85 billion.

Windows OEM revenue fell 5 percent, resulting from “lower commercial demand across all customer segments,” as well as strong results from the same quarter last year due to the end of support for Windows 7, Microsoft CFO Amy Hood said during the earnings call.

Still, revenue for Windows Commercial products and cloud services rose 13 percent during the quarter, while revenue for Microsoft’s Surface devices jumped 37 percent.

This article originally appeared at crn.com

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