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July 21, 2017

Microsoft chases down AWS as Azure doubles revenues

Dynamics 365, Office, LinkedIn, and Xbox have all contributed heavily to this strong performance.

By Tom Ball

Microsoft revenues soar in the fourth quarter results on the back of its cloud business, while Office and Dynamics 365 also help pave the way to success.

Revenues in this most recent fiscal quarter were reported as $23.3 billion, with its 2017 fiscal year total net income at $21.2 billion.

The strength of the Microsoft cloud services has been at the core of the company’s consistent progress, with Azure’s growth at 97 percent. A solid 15 percent year on year revenue increase in this area is responsible for the swift advance.

In light of these recent figures, Microsoft is now generating more revenue from Office 365 subscriptions than from traditional licensing of Office software.

LinkedIn has also proven a strong area for Microsoft, piling in a further $1.1 billion into the quarter four revenues, while Xbox is also doing well.

Comment from Nick McQuire, VP, Enterprise Research, CCS Insight said: “As expected, Microsoft posted solid results and continues to fly on all cylinders, especially across its cloud business. Azure’s meteoric rise in particular has been key to Microsoft’s success in 2017 and notably, the grounds for the firm’s recent restructuring. Azure is on track to become the dominant enterprise cloud platform in the industry over the next several years.”

With the recent announcement of Dynamics 365, Microsoft are entering the arena to provide an all-encompassing cloud based tool for the enterprise with sights set on revolutionary targets.

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“Few have the reinforcing breadth of a portfolio as vast as Microsoft’s which has been combining over the past few quarters to improve its gross margins. This bodes ominously for rivals such as Amazon Web Services, Google Cloud and IBM who are desperately trying to buck the trend towards commoditisation and falling prices in cloud services,” said McQuire.

READ MORE: Microsoft Azure to help drive Baidu driverless cars

IBM’s results reflected the struggle to remain in the running with formidable competitors that include Microsoft and Amazon, as the company’s revenues were down for the 21st consecutive quarter.

McQuire said: “Whilst successes in Azure, Office and Dynamics 365, LinkedIn as well as improvements to Surface are positive signs for 2017, the firm is not losing sight of future breakthrough technologies such as artificial intelligence and edge computing. Both are beginning to play an increasingly central role in its positioning for the future.”

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