Microsoft Reports Cloudy Earnings - In The Best Possible Way

Microsoft reported its Q4 earnings yesterday and outperformed even the most optimistic estimates offered by analysts. Revenue and profits were both way above expectations and performance year on year was massively improved too.

The reason was entirely down to the performance of the company's Cloud Computing unit, which is made up of Dynamics 365, Office 365 and Azure. It's the latter that is responsible for most of the growth this year, 

Azure and Amazon Web Services make up just about all of the Cloud services market. Amazon still has a big lead, but Microsoft has comfortably won second place and will look to leverage its strong enterprise position to close that gap.

Of course the picture wasn't completely rosy - Surface revenue was down 2% year on year, likely as a result of Surface Laptop and Surface Pro 2017 availability being too late in the quarter to materially impact numbers. And then there were Windows smartphone sales, which were down $381m to effectively zero. 

Microsoft may have missed the smartphone revolution, but its switch to a cloud first strategy has definitely paid off. 


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