Cloud Hosting

Microsofts cloud computing business continues to be a rising star, with revenue growing 11% to $6.8 billion in its Q3 2017 from a year earlier.

That growth was a welcome sight as the companys largest revenue streamthe Windows operating system and gamingdeclined for the third consecutive quarter. Microsoft reported $22.1 billion in overall revenue, which just missed analysts expectations. Microsoft shares tumbled in after hours trading.

These results included LinkedIns first full quarter as a Microsoft company. The professional social networking site brought in $975 million in revenue for the quarter, but produced an overall $386 million loss. Microsoft acquired LinkedIn, which now has 500 million members, for $26.2 billion.

One area of continued strength within cloud is Microsofts Azure platform, which gives developers paid access to Microsofts artificial intelligence algorithms for use in their own software. Azure revenue, nestled within the $6.8 billion of Intelligent Cloud revenue, jumped exactly 93% year over year for the second quarter in a row.

Revenue from Microsofts line of tablets and desktop computer, Surface, decreased 26% YoY. Its latest computer, the Surface Studio, was announced in October 2016, and has only started to roll out in large numbers this year. These preliminary numbers dont give great hope that the computer, geared toward artists and power users, will save Microsofts hardware business.

Of course, that just puts even more pressure on Azure and the enterprise cloud business to prop up Microsoftand suggests that CEO Satya Nadella could be right in shifting the companys focus toward the cloud. But it will be an uphill battle: Amazon and Google are fierce competitors in the space, with Amazon enjoying a large lead.

Link:
Satya Nadella's biggest bet for Microsoft could be its future - Quartz