Following a strong start to the 2020 fiscal year that saw US$33 billion in revenue, Microsoft’s Azure continued to experience strong growth despite concerns from experts that this growth would taper off.
Checking in at a year-over-year growth rate of 64 per cent, Azure’s performance was boosted by partnerships like the one announced this week between Microsoft and SAP SE to make Azure the preferred destination for all SAP customers, as well as preceding partnerships with VMware and Oracle to bring them into the Azure ecosystem.
“We’re extending beyond the cloud to the edge, enabling customers to get real-time insights where data is generated while ensuring security and privacy,” said Microsoft’s chief executive officer, Satya Nadella, in an earnings call. “And we’re seeing traction in every industry from Azure Sphere, securely connecting Starbucks coffee machines to Azure Stack, enabling scenarios from smart factories and modern compliant banking to mobile health care in remote areas.”
With a US$11 billion revenue, Microsoft’s Intelligent Cloud platform grew by 19 per cent year-over-year and now ranks as one of Microsoft’s largest product lines.
Its commercial business saw revenue of US$11 billion with a year-over-year growth rate of 14 per cent; powered by a 31 per cent growth rate from Office 365 Commercial revenue.
The Office 365 Consumer revenue only rose mid-single digits, but saw LinkedIn revenue rise 25 per cent.
Ryan Duguid, chief of evangelism and advanced technology at Nintex – a Microsoft partner – said he foresees this growth to continue throughout the 2020 fiscal year.
“After an outstanding 2019 that saw Microsoft push through and sustain its position in the trillion-dollar club, the company’s initial 2020 earnings suggest that Microsoft is moving from strength to strength,” said Duguid in an email statement after the earnings call. “Not only is the company continuing to grow market share through Azure, but there seems to be a newfound energy in the competition with Salesforce as a platform of choice for business applications, spearheaded by Dynamics, LinkedIn and the Power Platform. Combined with an impressive line-up of new devices showcased in the recent Surface event, it’s clear that this is going to be a big year for the tech titan.”
Our thanks to the investment research platform Seeking Alpha for the transcriptions from Microsoft’s Q1 earnings call.