Menu
Microsoft's Azure cloud revenue doubles, but phone sales plummet

Microsoft's Azure cloud revenue doubles, but phone sales plummet

Azure is going strong, but Microsoft's phone retreat is costing it

Microsoft's cloud push continued to pay off last quarter, with revenue from its Azure services more than doubling from the same period last year, the company reported Tuesday.

Overall revenue for the quarter was down, however, thanks partly to a steep decline in Microsoft's handset business. Total revenue for the three months ended June 30 was $20.6 billion, Microsoft said, down from $22.2 billion last year. Net profit was $3.1 billion.

Microsoft's retreat from the smartphone market hurt its device sales significantly. Phone revenue sank 71 percent, after the company back pedaled from its Nokia acquisition to focus on a few models of Windows phone.

The news came shortly after Microsoft announced that it would miss its goal of having 1 billion devices running Windows 10 by the middle of 2018, in part because its smartphones aren't selling well.

Microsoft's Intelligent Cloud business, which includes Azure services and on-premises server software, performed better, with revenue up 7 percent to $6.7 billion. Azure compute usage more than doubled year over year. Microsoft doesn't break out a dollar figure for its Azure sales, however, so it's hard to know exactly how large that business is.

Search revenue also grew, by 16 percent. More than 40 percent of search revenue in June was driven by Windows 10 devices, Microsoft said. That may have something to do with the fact that Cortana, the virtual assistant bundled with Microsoft's new operating system, uses Bing to run web searches.

Microsoft's productivity software business also grew significantly. The number of commercial seats of Office 365 sold grew 45 percent year-over-year, as more companies migrated to the subscription-based suite.

All in all, the quarter seems to be something of a validation for CEO Satya Nadella's focus on the cloud, with Office 365 and Azure posting strong growth. That said, the company's revenue declines still haven't leveled off, despite the rise in its newer businesses.

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags Microsoft

Featured

Slideshows

Educating from the epicentre - Why distributors are the pulse checkers of the channel

Educating from the epicentre - Why distributors are the pulse checkers of the channel

​As the channel changes and industry voices deepen, the need for clarity and insight heightens. Market misconceptions talk of an “under pressure” distribution space, with competitors in that fateful “race for relevance” across New Zealand. Amidst the cliched assumptions however, distribution is once again showing its strength, as a force to be listened to, rather than questioned. Traditionally, the role was born out of a need for vendors and resellers to find one another, acting as a bridge between the testing lab and the marketplace. Yet despite new technologies and business approaches shaking the channel to its very core, distributors remain tied to the epicentre - providing the voice of reason amidst a seismic industry shift. In looking across both sides of the vendor and partner fences, the middle concept of the three-tier chain remains centrally placed to understand the metrics of two differing worlds, as the continual pulse checkers of the local channel. This exclusive Reseller News Roundtable, in association with Dicker Data and rhipe, examined the pivotal role of distribution in understanding the health of the channel, educating from the epicentre as the market transforms at a rapid rate.

Educating from the epicentre - Why distributors are the pulse checkers of the channel
Kiwi channel reunites as After Hours kicks off 2017

Kiwi channel reunites as After Hours kicks off 2017

After Hours made a welcome return to the channel social calendar last night, with a bumper crowd of distributors, vendors and resellers descending on The Jefferson in Auckland to kickstart 2017. Photos by Maria Stefina.

Kiwi channel reunites as After Hours kicks off 2017
Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow Electronics introduced Tenable Network Security to local resellers in Sydney last week, officially launching the distributor's latest security partnership across Australia and New Zealand. Representing the first direct distribution agreement locally for Tenable specifically, the deal sees Arrow deliver security solutions directly to mid-market and enterprise channel partners on both sides of the Tasman.

Arrow exclusively introduces Tenable Network Security to A/NZ channel
Show Comments