Microsoft posted its fourth quarter earnings today, reporting revenue of $22.6 billion and net income of $5.48 billion. The most important data point was that revenue from the company’s Azure cloud division was up significantly, climbing over 100 percent year over year, as usage more than doubled. That gain helped to offset losses in the Personal Computing division, which was down 4 percent, dragged by a 70 percent decline in revenue from mobile phones.
“This past year was pivotal in both our own transformation and in partnering with our customers who are navigating their own digital transformations,” said Satya Nadella, chief executive officer at Microsoft. “The Microsoft Cloud is seeing significant customer momentum and we’re well positioned to reach new opportunities in the year ahead.”
While phones were a sore spot, revenue from both Surface and Xbox were up. Surface revenue increased 9 percent over the same period last year, and Xbox Live usage was up 33 percent. “This fiscal year we invested in innovation and expanded our market presence in key product areas and geographies,” said Amy Hood, executive vice president and chief financial officer at Microsoft. “I am pleased with the execution from our sales teams and partners this quarter who delivered a strong finish to the fiscal year.”
The cloud computing business has been a major driver of growth over the last few years at Microsoft, Google, and especially Amazon. The resources these companies devoted to building out their internal infrastructure has now become an on-demand commodity, and the appetite for these services has shown no signs of abating.