Microsoft's cloud business is booming

Microsoft might have reported its biggest loss ever thanks to the Nokia acquisition, but like I said before, not to worry. The software company has simultaneously reported great revenue in the cloud front.

Commercial cloud revenue grew $832 million (£532 million) or 88 per cent, with its champions, Office 365, Azure and Dynamics CRM Online leading the charge. The company is now on an annualised revenue run rate of over $8 billion (£5 billion).

While reporting in the earnings, Microsoft CEO Satya Nadella said Microsoft remains "on track to achieve our $20 billion commercial cloud ambition in fiscal 2018."

"Office 365 is now in four out of five Fortune 500 enterprises, and more than 55 per cent of the install base is on premium workloads. It is clear that we have success moving customers to the cloud given half of all enterprise agreement renewals were for Office 365 this quarter," the company said during investor call.

Office 365 has seen a 74 per cent increase in users, year-on-year, Firstpost says. In addition, Microsoft said small and medium businesses offer "one of our best opportunities for new growth in the cloud." "For more than a year now we’ve seen 50,000 new SMB customers adopt Office 365 every month."

Microsoft Office 365 is the biggest revenue driver of the company's enterprise cloud offerings, Business Insider says. “And it's growing fast: Microsoft reported today that Office 365 has added 3 million subscribers in the last quarter, bringing it to 15.2 million users total.”

With its cloud business, Microsoft seems to be heading in the right direction, and commentating on this new direction for the company, Piers Linney, Co-Ceo of Cloud Services Provider (CSP) and Microsoft Gold partner Otsourcery says that the results demonstrate the success of Microsoft’s strategy in putting cloud computing at the forefront of its commercial strategy, as customers shift away from traditional on-premises storage.

Linney states: “The growth of cloud brought a number of challenges to many of the established players in the industry who have had to rapidly adapt to new business models as a result. These latest results from Microsoft, while mixed, show that it has held its strong footing in what is a rapidly expanding cloud market.

“When we chose to position Microsoft’s product stack and the Microsoft cloud platform at the heart of our offering, Outsourcery was questioned as to why we were limiting our potential market and not taking a more agnostic approach. However, when you think that virtually every company uses some sort of Microsoft tool, we felt that this was a sensible move to grow our offering. Further to our Microsoft services, we have been passionate about developing our own public sector proposal and bringing added value to the table through our partner programme. Additionally, we have worked to create our own Ofcom-regulated, enterprise grade O-Cloud platform.

“Working with Microsoft enables us to deliver expertise in an offering that is always reliable and best-of-breed. Microsoft’s latest cloud sales result justifies our decision to remain Microsoft-centric and shows that the strength of Microsoft, and Outsourcery in turn, will only continue.”