On cloud nine: Microsoft betting its future on the cloud as profits bounce back

Microsoft has revealed significant growth in its cloud computing service helped boost profits to more than $3bn. That was far better than the $3.2bn loss for the same three-month period to June last year when Microsoft booked hefty charges on writing down the value of mobile phone assets it bought from Nokia. “This past year was pivotal in both our own transformation and in partnering with our customers who are navigating their own digital transformations,” said chief executive Satya Nadella. Overall, the results were better than most forecasts and sparked an after-hours gain of more than three percent for the company, which is seeking to shift its emphasis to cope with declining sales of personal computers.

The Microsoft Cloud is seeing significant customer momentum and we’re well positioned to reach new opportunities.

Satya Nadella

Over the past quarter, Microsoft boosted revenue in its “Productivity and Business Processes” unit which includes Office, the software suite which has been largely moved to the internet cloud. The company’s “Intelligent Cloud” operations also grew, driven by revenue growth from Azure, Microsoft’s platform for business cloud computing. In June, Microsoft announced a $26 billion acquisition of LinkedIn, the biggest-ever deal for a social media company, which is expected to help the tech giant increase its cloud offerings for business. Microsoft saw a slight drop in revenue from the “More Personal Computing” division, which includes the Windows operating system as well as devices such as Surface.