Enterprises are hungry for its heavenly products which include Office 365, Azure and Dynamics CRM. According to the company’s filing for the first fiscal quarter, revenues rose 128 percent year-over-year. Office 365, on the consumer side, by the way, now boasts an impressive 7 million subscribers to its Home and Personal software.
The company’s rapidly growing SQL Server business grew by double digits as did Lync, SharePoint and Exchange, its productivity products.
All Together Now
Microsoft aims to deliver products that work together to differentiate itself from the competition and proof is in the pudding that it is executing well.
Consider that even its hardware sales numbers are impressive; Surface sales raked in $908 million this quarter, up 127 percent from the $400 million reported at this time last year.
Though Microsoft’s overall earnings are down 13 percent year over year ($0.54 per share) it beat estimates of $0.49 and reported revenue of $23.20 billion, up 25 percent year over year and beating projections.
And the picture for the future may actually be even brighter than it looks because Cloud revenue accumulates over time as opposed to at once, like in a onetime software purchase.
Finally, it’s worth noting that during the earnings call, Microsoft CEO Satya Nadella spoke of the company’s commitment to Xbox and its ability to drive value Enterprise business. “Gaming is the one category that we’ve said we’ll invest in it for its own sake in driving enterprise value," he said. "The reason we’re so competitive now in Cortana and speech recognition, which I think is core to productivity, first started with Kinect and Xbox."
Lessons Learned from Gaming
And it already seems to be reaping rewards. Last week Eron Kelly, general manager of the company’s data platform division, told us that his group is beginning to create quick start applications that leverage lessons learned by the Xbox group around machine learning, recommendation engines and customer insights.
“We are innovating faster, engaging more deeply across the industry, and putting our customers at the center of everything we do, all of which positions Microsoft for future growth,” said Nadella during the earnings call. “Our teams are delivering on our core focus of reinventing productivity and creating platforms that empower every individual and organization.”
For a company that executives like Marc Benioff were writing off a year ago, Microsoft is doing great.