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Microsoft
Corp.
achieves for the first time an annual business turnover of 100 billion dollars while the software giant turns from a software provider into a major player in cloud computing.
Much of this growth has come from persuading customers who manage Microsoft software in their own data centers to mix with cloud computing services, an activity known as hybrid cloud computing. Microsoft remains a distant # 2 in the cloud business behind
Amazon.com
Inc.,
but has imposed itself as a viable option for companies entering the transition.
Microsoft's success in setting up its cloud business has boosted the company's share of more than 40% last year. The company's market capitalization reaches $ 800 billion, which places it in a league with the Internet giants
Apple
Inc.,
Amazon and
Alphabet
Inc.
Microsoft shares moved little after the company announced robust fourth quarter fiscal results, but jumped more than 3% during open trading hours as the CFO
Amy Hood
gave Wall Street analysts a good outlook for the current quarter.
The 43-year-old company struggled for years as it struggled against a slow-growing personal computer business, which was impeding its franchise of Windows operating systems. Microsoft has been late for changes in the tectonic industry, including mobile devices and web search.
But the company reversed its fortunes, largely under the direction of the chief executive.
Satya Nadella,
focusing on the booming cloud computing market. Earlier this week,
Walmart
Inc.
announced a five-year agreement to use Microsoft cloud services.
In the fourth quarter, revenues from server products and cloud services, a category that reflects Microsoft's performance in the hybrid cloud, grew by 26 percent. The company does not disclose segment revenues.
Analyst of Stifel Nicolaus & Co.
Brad Reback
He estimates that revenues in the category reach $ 7.9 billion, a "massive" growth. Microsoft has "played on its strength," he said, using traditional server software to attract long-time customers into the cloud
. a new accounting standard adopted by the company at the beginning of its fiscal year. Mr. Nadella, in the company's call with analysts, cited Microsoft's "hybrid value proposition" as the reason for its quarterly growth.
Overall, Microsoft posted net earnings of $ 8.87 billion, or $ 1.14 per share. Using the new accounting standard, Microsoft's net income reached $ 8.07 billion a year ago.
The performance of Microsoft Azure cloud services, as well as its Office 365 online productivity service, has pushed Microsoft's actions to over the past two weeks. Stocks ended Thursday down less than 1% to $ 104.40, just before their $ 106.40 peak on Tuesday
After hours, stocks hit record highs of over $ 108 as a result Ms. Hood for the Azure and Windows segments. The projections exceeded Wall Street's expectations.
In the fourth quarter, the company's Intelligent Cloud segment revenue, which includes Azure, grew 23 percent to $ 9.61 billion. Azure's revenue rose 89%, up from 93% three months ago – the first time the company has grown less than 90% since Microsoft released the measured in October 2015.
The process industry grew 13% to $ 9.67 billion. The commercial version of its Office 365 online productivity service grew by 38 percent, compared with 42 percent growth three months ago.
Turnover in Microsoft's More Personal Computing segment, including the company's venerable Windows franchise. gaming companies, gained 17% to 10.81 billion dollars. Microsoft does not release a business figure for its Windows business, but the company said sales of the operating system to businesses grew 14 percent over the period.
Gartner
Inc.
and International Data Corp. saw the largest increase in PC shipments in six years, in part because professional buyers switched to Windows 10 before the expiration of Windows 7 in January 2020.
Analysts surveyed by S & P Global Market Intelligence expects Microsoft to report earnings per share of $ 1.08 on revenue of $ 29.23 billion.
Write to Jay Greene at [email protected]
Appeared in the print edition of July 20, 2018 under the name "Microsoft Revenue Pushed Up By Cloud".
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