On Wednesday, Microsoft Corp, an American multinational company stated that its revenue and profits for the first quarter have gone up and surpassed the estimates of Wall Street because more business houses have purchased its Office 365 software and signed up for its cloud computing services, Azure.
Since 2014, when Satya Nadella became the Chief Executive Officer of Microsoft, its shares have tripled as Nadella refocused the working of the company by making building data center softwares and services a key element of the services provided by the comapany.
The share prices have witnessed a rise of more than 21 percent in the past one year gaining 1.9 percent in the after-hours trading after the earnings report was announced.
The company has shifted from the on premise data centers which it provided to cloud services which fueled its growth, helping it to beat the expected profits which were stated by The Wall Street.
The commercial cloud revenue for the first quarter of the present year has increased by 47 percent (when compared with the first quarter of the previous fiscal year), accounting for $8.5 billion. This revenue included the sales of Azure.
Whereas the growth margin of the company reached 62 percent which was 58 percent in the first quarter of the previous fiscal year and 59 percent in the fourth quarter of the previous fiscal year.
However, the revenue from Azure increased only 76 percent which is much slower that the increase it witnessed in the previous quarter which was equal to 89 percent.
The leader in the cloud computing business, Amazon.com Inc (AMZN.O) has a market share of about 30 percent in the second quarter whereas the market share of Microsoft Corp is 18 percent and has also witnessed an increase from the previous quarter in which it was equal to 16 percent.
Source: Reuters, Pressreader
