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Microsoft’s cloud business reports growth during the pandemic

Technology giant Microsoft’s cloud business propelled its first-quarter earnings (ending Sept. 30, 2020) posting a 12% increase in revenue or $37.2 billion.

The COVID-19 pandemic drastically changed business operations with companies forced to stop office operations. Many, if not all, have relied heavily on cloud technology to ensure business continuity. As a result, the need for cloud services increased significantly.

“Demand for our cloud offerings drove a strong start to the fiscal year with our commercial cloud revenue-generating $15.2 billion, up 31% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “We continue to invest against the significant opportunity ahead of us to drive long-term growth.”

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Server products and cloud services revenue increased by 22% up by 21% in constant currency and this is driven by Azure, Microsoft’s flagship cloud brand, revenue growth of 48% up 47% in constant currency).

Dynamics products and cloud services revenue increased 19% up 18% in constant currency driven by Dynamics 365 revenue growth of 38% up 37% in constant currency. While its revenue in Intelligent Cloud was $13 billion and increased 20% up 19% in constant currency.

Even if Windows OEM revenue declined by 5%, Windows Commercial products and cloud services revenue increased by 13% up 12%.

Revenue in more personal computing was $11.8 billion and increased by 6%. Xbox content and services revenue increased by 30%. Surface revenue increased slightly by 37% from 36%. Search advertising revenue, excluding traffic acquisition costs, decreased 10% down from 11% in the same period last year.

“The next decade of economic performance for every business will be defined by the speed of their digital transformation,” said Satya Nadella, CEO of Microsoft. “We are innovating across our full modern tech stack to help our customers in every industry improve time to value, increase agility, and reduce costs.”

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