Microsoft stock hit an all-time high yesterday, reaching over $60 after hours. The growth has been attributed to Microsoft’s earnings in the cloud-computing business, which was revealed in the company’s FY17 Q1 financial report.
According to Microsoft, Azure cloud services and data center tools grew 8% since this time last year, up to $6.4 billion. Dynamics revenue is 11% higher, attributed to an increase in online revenue. As a whole, Azure revenue grew by 116% year-on-year. Furthermore, Azure usage has doubled in that period.
This is all testament to Microsoft’s continued investment in the cloud business. Over the past year, the company has expanded both the coverage and capabilities of its data centers. As a result, run rate was over $13 billion, more than the previous 2.1 billion estimate.
Fortune 500 and Declines
According to Nadella, over sixty percent of Fortune 500 hundred companies have at least three of Microsoft’s cloud offerings. The Fortune 500 adoption is 20% higher than last year.
“They choose Microsoft for three reasons,” he said. “They want a trusted, global, hyperscale cloud provider to meet their enterprise needs; hybrid support architected for hyper-scale service and cloud service; and they want high-level services to help them build their own digital capabilities, inclusive of DevOps productivity, new IoT and enterprise app development, advanced analytics, and machine learning and AI capability.”
Of course, it wasn’t all good news. Phone revenue fell by 72% following the axing of the Lumia line. Similarly, gaming revenue decreased by 5%, while Windows OEM revenue remained flat. The only growth in Microsoft’s ‘Personal Computing’ section was search ad revenue, up by 9% excluding acquisition costs.
The picture we’re getting from the data mirrors the internal shift in philosophy. The company is transitioning from a Windows company to a cloud one, and doing a pretty good job of it. Microsoft stock was higher even than 1999, when it was ruled to have a monopoly on the OS market.
You can read the full FY17 Q1 report via Microsoft’s press release.