February 27, 2018

Microsoft Cloud Business Is Paying Off

Microsoft cloud businessToday, more and more customers are requiring businesses to advance through the digital transformation. A technology that is rapidly changing the organization and is helping it meet the requirements of the 21st-Century customer is cloud computing. A host of companies today are enabling cloud computing for the business but the podium continues to be occupied by the big three—Microsoft, Amazon and IBM. Most of the cloud computing market share is with Microsoft and here we explore the reasons for it!

Customers on the cloud are increasing each day. As more and more customers move to the cloud, the companies providing cloud computing services are starting to think about how they can improve customer experience on the cloud to help the businesses using their service to gain an edge over competitors.

The more businesses the cloud providers help, the more they will grow their market share. This is something Microsoft—the American multinational tech company has realized well. Ever since Satya Nadella—the Indian born American business executive, took charge at the company, Microsoft has been doing all the right things and making all the right moves for its cloud computing business.

Since 2015, the cloud computing business of Microsoft has grown each year and today it’s reaping rich rewards for its efforts to enhance cloud for the business. The company recently released its numbers for the quarter ended December 31, 2017 and the results showed a massive upturn in the revenue of cloud computing services.

A Breakdown of Microsoft’s Cloud Computing Revenue

As mentioned above, Microsoft’s cloud business continued to grow through 2017 and the company’s figures for the quarter ended December 31, 2017 prove this. The overall growth of cloud services during the quarter was 18%. The biggest gainer among Microsoft’s cloud services was Azure which experienced a 98% increase in revenue.

Microsoft realizes well that its future and that of other tech companies depends on the quality of cloud services offered by them. This is the reason the American tech company is investing heavily in its cloud services to compete with and gain an edge over other big-named providers of cloud computing such as Amazon, IBM and Salesforce. Coming back to the cloud revenue figures of Microsoft for the last ended quarter, a service that saw good growth during the period was the company Office 365 subscription service.

As of now, there are over twenty-nine million consumer users of the Office 365 service, and revenue for Office 365 commercial increased by forty-one percent during the previous quarter. In statement released for the public, Satya Nadella—the CEO of Microsoft Corp, credited the growth in revenue of cloud services to the unique value across productivity solutions offered by the company and to the company’s continued investments in AI services, data and IoT across the cloud.

Nadella expects the same things to drive revenue growth in the future as well. Following is the complete breakdown of the company’s cloud services revenue for the last ended quarter:

  • Thanks to a forty-percent increase in the revenue of Office 365 commercial, Microsoft experienced a 10 percent growth in the revenue of office commercial products and cloud services
  • Consumer subscribers of Office 365 increased to over twenty-nine million, prompting a twelve percent increase in the revenue of Office consumer products and cloud services
  • Thanks to a sixty-seven percent increases in revenue of Dynamics 365, the revenue of Dynamics CRM products and cloud services increased by ten percent
  • Experiencing a twenty percent growth for a fifth consecutive quarter, LinkedIn contributed over a billion dollars during the quarter

Driven by the 98% growth in the revenue of Azure, revenue for Intelligent Cloud services increased by fifteen percent during the quarter, and exceeded $7.5 billion. The increase in revenue of intelligent cloud services included an 18% increase in server products and cloud services. For Azure, this was the tenth straight quarter where it experienced a revenue growth of 90% or more.

The Cloud Revolution is Here to Stay

The three biggest and most influential providers of cloud services namely Microsoft, Amazon and IBM will continue to grab the headlines in the cloud computing world in 2018 and beyond. To outshine the other, each of these cloud computing vendors will adopt a strategy that is markedly different from that of their competitor. But, in the end, all three will be taking initiatives that help to reshape and drive changes in the cloud marketplace for years to come.

The cloud computing initiatives of the likes of Microsoft, Amazon, and IBM reflect the how the cloud business has evolved from a concept driven by tech to one increasingly focused on the development of customer-centric messaging, positioning and products. After several years of infancy, cloud computing is finally starting to grow up and much of the credit for this goes to the three big cloud computing vendors mentioned above.

The Benefits of Switching to Microsoft’s Cloud Computing Platform

For businesses, cloud computing is fast becoming the rule rather than the exception. Don’t want to be left behind by your competition? Then make the switch to cloud computing if you haven’t done that already. There are many benefits of switching from traditional IT systems and software to cloud services such as Microsoft’s Azure and SharePoint service including:

  • Minimal launch time
  • Greater scalability
  • Big Data
  • Low startup and capital costs
  • No or minimal infrastructure maintenance
  • Intelligent automation
  • Immediate global workforce

Making the switch to cloud services such as the ones mentioned above is beneficial for businesses of all types and sizes. Considering how well they are doing in terms of revenue, there should be no doubt in your mind regarding the effectiveness of the cloud computing platforms provided by Microsoft.

If you have any further questions about Microsoft’s cloud computing service, then get in touch with us today!

by Bobby J Davidson

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