Microsoft's cloud bet pushes annual sales to more than $ 100 billion

Microsoft's Cloud Deployment Helped Power Business to $ 100 Billion in Sales

Microsoft ( ] MSFT ) ] said Thursday that it had posted sales of $ 110 billion for the 2018 fiscal year ending in June, an increase of 14% over the previous year. 39, previous year. CEO Satya Nadella credited the "first investments" in cloud services for results.

The company's commercial cloud business reached $ 6.9 billion last quarter, up 53% from the same period last year. This helped push Microsoft's overall quarterly sales to $ 30.1 billion, an increase of 17% over the previous year.

Under the leadership of Nadella, Microsoft has reorganized its internal operations to prioritize the cloud and downgrade its historical business, Windows. The shift has placed Microsoft in the forefront of the rapid growth technology segment after years of struggle to compete in smartphones and online services like research.

Microsoft surpassed Google ( GOOGL ) in the public cloud market share in 2016 and now ranks second Amazon ( ] AMZN ) according to data from Synergy Research Group.

Related: Walmart and Microsoft team up to fight Amazon

"It's no longer a three-horse race," says Brad Reback, an analyst at Microsoft at Stifel. "It's Microsoft and Amazon, with Google a distant third."

In a clear jab at Amazon, Microsoft recently signed a five-year cloud services agreement with Walmart ( WMT ) . The agreement should help both companies to take Amazon.

It's a big market to dominate. According to IDC forecasts, global spending on public cloud services and infrastructure is expected to reach $ 160 billion this year and reach $ 277 billion by 2021.

Microsoft's growth in this market catapulted its title to historic highs this year. Analysts Morgan Stanley predicted in March that cloud computing could push Microsoft to a market capitalization of $ 1 trillion joining Apple ( AAPL ) and Amazon in the race for this astronomical figure.

Microsoft's stock climbed 4% in the hours that followed Thursday after the earnings report.

CNNMoney (New York) First published on July 19, 2018: 5:51 PM ET