Microsoft beat Wall Street forecasts for quarterly profit thanks to cloud computing business as more enterprises seek to cut data storage costs by adopting cloud-based software and moving their applications to data centres.
The company’s flagship cloud product Azure, which competes with Amazon Web Services (AWS), recorded revenue growth of 93 percent in the third quarter ended March 31.
Azure’s growth has propelled Microsoft to the No. 2 position in the $15.6 billion cloud computing market with a 14 percent share, behind AWS’s 32 percent, research firm Canalys estimated in February.
Revenue at Microsoft’s productivity and business processes unit, which includes Office 365, rose 17 percent to $9 billion, topping analysts’ average expectation of $8.73 billion.
Revenue for Microsoft’s More Personal Computing unit rose 13 percent to $9.9 billion, including a 32 percent increase for its Surface business.
Overall, the Redmond, Washington-based software maker’s revenue rose 16 percent to $26.82 billion, ahead of expectations of $25.77 billion.
Net income rose to $7.42 billion, or 95 cents per share, from $5.49 billion or 70 cents per share, in the year-ago quarter. Analysts had expected earnings of 85 cents per share.