Software King of the World Microsoft is a little worried about the future of its Azure product after it posted a flat top line in its latest quarterly results.
Generally, Vole’s numbers were reasonable. Revenues in the second quarter climbed two per cent to $52.7 billion during the quarter. Net income was $16.4bn GAAP, a drop of 12 per cent compared to the same period of its last fiscal year.
Sales in Azure and other cloud services grew 31 per cent, aiding revenues in Microsoft’s intelligent cloud segment to bring in $21.5 billion.
While that would get most people excited, Vole was expecting a lot more from its Azure numbers with much weaker results throughout December and only moderate consumption growth in Azure.
Microsoft chief financial officer Amy Hood said: “We exited Q2 with Azure growth in the mid-30s in constant currency. And from that, we expect Q3 growth to decelerate roughly four to five points in constant currency. Foreign exchange impact in Azure is about one point more than at the segment level.”
The CFO said Microsoft also expects revenues in its on-premises server business to decline low single digits as demand for hybrid solutions will be more than offset by unfavourable foreign exchange impact.
