The Intelligent Cloud segment - including Azure, Windows Server and SQL server - was also a successful business for the company in the quarter, raking in $7.8 billion in revenue, surging 15% year-over-year. Likewise, revenue in Productivity and Business Processes was up to $9 billion, which was a total increase of 25 percent year-over-year. Office 365 consumer subscribers also increased to 29.2 million in the quarter. That marked the tenth straight quarter of Microsoft reporting that Azure revenue grew 90 percent or more on a year-over-year basis.
The firm's main hardware product, the tablet-laptop hybrid Surface, saw a revenue increase of 1% on the last quarter.
"The intelligent cloud, intelligent edge paradigm is fast becoming a reality", Microsoft CEO Satya Nadella said during the company's quarterly earnings call Wednesday. Unfortunately, as we already reported, Surface sales were up only 1 percent, with only $1.3 billion in sales.
At the Intelligent Cloud division, sales were up 15 percent to United States dollars 7.8 billion, driven by continued strong demand for Azure could services, which posted revenues up 98 percent from a year ago.
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Reuters Microsoft Corp. beat Wall Street's profit forecast on Tuesday, helped by growth in its cloud computing business, but took a $13.8 billion one-time charge due to the new US tax law.
CEO Satya Nadella highlighted Microsoft's investment in IoT, AI and cloud as key to the growth.
This came despite Xbox playing second fiddle to Sony in the console market, while Nintendo's Switch was the unexpected hit of the year.
Microsoft, the software company famous for its Windows operating system, is valued at about $730 billion. "I do, in general, expect our strong performance in Azure to continue", chief financial officer Amy Hood said in an interview. Year-to-date, MSFT has gained 11.07%, versus a 5.64% rise in the benchmark S&P 500 index during the same period. Analysts had a consensus revenue estimate of $28.39 billion for the quarter. Earlier this month, a KeyBanc analysis concluded its Azure cloud services had grabbed back market share from its biggest competitor, Amazon, though it still trails by 42 percentage points in the no. 2 spot. Microsoft said that gaming revenue was up 8 percent in the gaming industry's all-important holiday quarter.