Microsoft celebrates Azure growth


Posted by Faustine Ladeiro-Levent 8 months ago

Microsoft’s Azure cloud offering is continuing to make gains on its rival Amazon Web Services (AWS), new figures confirm.

In the final three months of 2019 revenue from Azure grew by 62%, according to Microsoft’s recently published earnings report.

Last quarter, the company’s intelligent cloud service – comprising Azure and Enterprise Services – amassed £9.2 billion in revenue. That equates to almost a third of its total revenue (£28.3 billion), explains a post on CloudPro.

Out of Microsoft’s three operating groups, its cloud services division saw the most substantial revenue growth with an increase of 27%. Elsewhere, its business and productivity division (of which LinkedIn is a part) increased by 17% to reach a total of £9.1 billion. Lagging behind in terms of growth was personal computing, which saw a 2% rise from the previous quarter, with revenue of £10.2 billion.

In a post on Seeking Alpha, investment banking analyst Michael Turits cited the role played by Azure’s innovation and software updates in Microsoft’s growth.

Turits stated: “Our Microsoft checks were strong this quarter, with the biggest improvement from resellers that were seeing an uptick in Office 365 E3 to E5 conversions, on increased interest in collaboration and integration of Microsoft Teams, and from security including EMS, Azure Active Directory and Azure Sentinel.”

Azure has seen consistent upward growth for a number of years now. Even in its worst fiscal quarter (between July and September 2019), the cloud service’s revenue was still up by 59%.

Azure might be one of the fastest growing cloud computing services, but AWS currently dominates the field. AWS controls around a third of the cloud infrastructure market, with revenue growing by 34% last quarter.

Trailing behind is Google Cloud, but that too is growing. In Alphabet’s first public-cloud revenue report, its revenue increased 53% last quarter.

AWS might beat Azure and Google Cloud in market share, but it lags behind in terms of profitability. Last year, it saw revenue of £26.9 billion, compared to Microsoft’s revenue of £34.4 billion.

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