Software king of the earth and the rings of Uranus, Microsoft, has seen commercial revenue from Office 365 beating the revenue generated by its traditional licensing software for the first time.
Releasing its figure for the three months ending 30 June, Vole said overall revenue was up 13 percent year on year to $23.3 billion.
Microsoft revealed that revenue from Office 365 had overtaken revenue from its traditional licensing business.
Microsoft does not release exact revenue figures for Azure, instead grouping it with Dynamics 365 and Office 365, but said Azure revenue for the quarter was up 97 percent year on year.
CEO Satya Nadella said that Microsoft’s world-view of an intelligent cloud and an intelligent edge was resonating with businesses everywhere.
“Every customer I talk to is looking for innovative technology to drive new growth, as well as a strategic partner who can help build their own digital capability. Microsoft is that trusted partner.”
The importance of Microsoft’s cloud business was highlighted further by a decline in product sales, down 1.5 percent to $13.8 billion. Surface revenue fell two percent, after falling 26 percent in the previous quarter.
Nick McQuire, vice president of enterprise research at CCS Insight, said that Azure will become the market-leading enterprise cloud platform.
“Azure is on track to become the dominant enterprise cloud platform in the industry over the next several years,” he said.
“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 which are desperately trying to buck the trend towards commoditisation and falling prices in cloud services.
“While 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.”
