While the software king of the known universe, Microsoft still reigns. Its results show a double digit rise in revenue but there was some concern on Wall Street about the state of Azure.
The vendor’s share price fell more than four percent in after-hours trading, with sales slightly below expectations. Revenue for the three months ending 31 December increased 12 percent to $10.3 billion.
Microsoft did not mention its Azure revenue numbers, but offers a year-on-year growth figure. In this quarter sales rose 76 per ent, continuing a long-running trend of high double-digit growth.
But if you look at the numbers for last year this number is well behind the 98 percent growth it scored in the second quarter.
The Q2 growth is also the same as Microsoft saw in Q1 and this seems to suggest that Azure growth is beginning to flatten.
CEO Satya Nadella insisted that Azure infrastructure was not that important as life does not stop at Azure.
“For one customer it was Microsoft 365 as well as Azure. In many cases, it’s Dynamics 365. Any IoT project on Azure leads to a Dynamics field service project in most instances. So we’re seeing the breadth and depth of our cloud offering, which is where we are really architected to have real synergies.”
Nadella also stressed that Microsoft is not seeing demand wane for Azure.
“Our own demand for it – we don’t see any change. “In fact, it’s very healthy and we think that it will continue to be healthy. If anything, at our scale – as you can imagine – we are becoming much more efficient in how we use software to utilise the capacity we have. So we have significant gains in utilisation across our estate.”
Vole has grouped Azure with the rest of Microsoft’s Intelligent Cloud unit – which saw revenue up 20 percent to $9.4 billion. Within this unit, server products and cloud services grew 24 percent, while enterprise services were up six percent.
But Microsoft needs Azure to keep its growth if it is hoping to compete with AWS and it needs to come up with something to spark more growth.
