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Partners recognised as Microsoft's cloud revenue surges

Partners recognised as Microsoft's cloud revenue surges

Microsoft's intelligent cloud segment, which includes Azure, rose 27 per cent

Credit: Reuters

Microsoft has beat analysts' estimates for quarterly revenue, driven by strength in its cloud computing platform Azure, sending its shares up 2 per cent.

Revenue in the company's intelligent cloud segment, which includes Azure, rose 27 per cent to US$11.9 billion in the quarter, beating analysts' average estimate of US$11.40 billion.

Microsoft executive vice president and CFO Amy Hood gave a nod to partners, who played a big part in helping to lift the vendor's cloud revenue.

"Strong execution from our sales teams and partners drove Commercial Cloud revenue to US$12.5 billion, up 39 per cent year-over-year," said Hood.

Microsoft faces intense competition from Amazon.com's AWS for share in the cloud infrastructure market, as more companies look to shift their computing work to data centers managed by cloud providers.

Amazon Web Services dominates the market with 32.6 per cent share followed by Azure that holds about 17 per cent share, according to data from research firm Canalys.

Azure, which has been reporting slowing growth since last year, posted quarter-over-quarter growth of 62 per cent in the second quarter versus 59 per cent in the first quarter.

Revenue from its personal computing division, its largest by sales, rose 2 per cent to US$13.2 billion, beating analysts' expectations of US$12.84 billion. The unit includes Windows software, Xbox gaming consoles, online search advertising and Surface personal computers.

The tech giant's total revenue rose 13.7 per cent to US$36.91 billion in the quarter ended Dec. 31, beating analysts' estimates of US$35.68 billion, according to IBES data from Refinitiv.

Net income rose to US$11.65 billion, or US$1.51 per share, from US$8.42 billion, or US$1.08 per share, a year earlier.

Analysts on average had expected a profit of US$1.32 per share.

(Reporting by Ayanti Bera in Bengaluru and Stephen Nellis in San Francisco; Editing by Maju Samuel; with ARN staff)


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