Microsoft on Thursday reported that its quarterly earnings was lifted on the back of its shift to focusing on computing services hosted in the Internet cloud. The US technology giant said it made a profit of $6.5 billion (roughly Rs. 41,832 crores) in the recently ended quarter as revenue rose to $23.3 billion (Rs. 1,49,959 crores). Microsoft shares – which closed the official trading day at a new all-time high of $74.22 – leapt after release of the earnings figures, only to come back down and even slip a bit in after-market trades to $73.65.
About $7.4 billion (roughly Rs. 47,625 crores) of the revenue in the quarter came from “intelligent cloud” offerings that are part of Microsoft shedding its legacy of packaged software and embracing a future in which computing power is hosted online as a service. “Innovation across our cloud platforms drove strong results this quarter,” Microsoft chief executive Satya Nadella said in a statement. Microsoft uses the term “intelligent cloud” to refer to services that let businesses take advantage of computing power online in its data centers, coupled with insights or analysis by artificial intelligence software.
Microsoft also said cloud-based products like Office 365 rose in the quarter, with the number of Office 365 subscribers climbing to 27 million. The quarterly profit figure topped Wall Street expectations, while revenue was roughly in line.
During an earnings call, Microsoft executives sidestepped providing details about recently disclosed plans to cut jobs, evidently while reorganizing its global sales operations to better hawk cloud products. The pioneering software firm had more than 121,000 employees worldwide at the end of March, according to its website.
It is seeking to be a first port-of-call for businesses relying on cloud computing, as the industry moves away from packaged software. Microsoft’s cloud computing platform will be used outside China for collaboration by members of a self-driving car alliance formed by Chinese Internet search giant Baidu, the companies announced this week.
The US software powerhouse is one of more than 50 entities to join the Apollo alliance created by Baidu in April. Microsoft will enable alliance members to collaborate, share information and tap into its Azure cloud computing service, according to the companies.
Azure faces competition from technology titans Amazon and Google. Each of the companies has also been investing in artificial intelligence, which can make services hosted in the Internet cloud more intuitive when it comes to handling data and meeting user needs.