Microsoft Cloud Was A Ray Of Sunshine This Quarter With Revenue Up 128%
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In any case, the whole "commercial other" unit is growing: It generated over $2.4 billion last quarter, up from $1.6 billion in the year-ago quarter.This includes Azure, Microsoft's Amazon competitor; Office 365, it's Google Apps competitor; and its Dynamics CRM Online, its Salesforce.com competitor.
Microsoft CEO Satya Nadella insists that the growing numbers show, "it's no longer for debate whether we get the cloud."Now, $1 billion, or even $4.4 billion, is still peanuts compared to the money Microsoft generates from selling software to businesses the old-fashioned way, through licenses. Commercial revenue from that was nearly $9.9 billion for the quarter, particularly helped by sales of Microsoft's database, SQL Server. And there's a trickle effect when companies buy something like a database. They also have to buy Windows licenses to run the database on PCs and servers.
And if there is a dark cloud, it's this: half of that cloud growth came at the expense of regular Microsoft Office licenses. Office Commercial revenue declined $322 million, or 7%.
Ultimately though, moving companies from regular software to the cloud is good news for Microsoft. Microsoft should make more money over time with cloud versions of Office. Businesses are willing to pay more because they automatically get security updates and the latest features. And they save money overall because they don't need to buy computer servers and other hardware.The losers, for now in this switch to the cloud are the hardware makers like IBM and HP, who are working hard to nab customers for their own clouds.
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