Microsoft’s quarterly profits have been given a boost due substantial growth in the company’s cloud computing unit. Last year Microsoft made a $3.2 loss from April to June, largely due to writing down the mobile phone assets that Microsoft purchased from Nokia in 2014. Microsoft had to write these assets down which had a significant influence on the company’s annual profit and loss accounts.
Compare that to the 2016 first quarter profit of $3.1 billion. This resulted in shares rising 4% in after-hours trading on Wall Street. Rather than expecting significant growth of the company in general, investors were expecting gains from Azure, Microsoft’s cloud computing service. Their expectations were justified in spades!
Revenue from the cloud computing unit rose to $6.7 billion, a 7% increase, while there was also a adjusted revenue increase by $420 million to $22.6 billion. While PC sales have slowed, this increase is largely due to the focus of Chief Executive Satya Nadella on the firm’s cloud computing service. The general cloud data storage service has involved a fight between major players such as Amazon and Google among others.
Through Nadella, Microsoft acquired LinkedIn last month for a total of $26.2 billion, giving Microsoft access to the details of 433 million users of LinkedIn. Microsoft is now able to use its MS Office 365 cloud service to enable business clients to get more insight into the activities of their customers.
In fact Microsoft has several problems it must shortly resolve. One of these is its stated deadline to get Windows 10 uploaded to a billion mobile devices by 2017. Microsoft has had to state that this deadline would not be reached due to issues with the Nokia mobile phone division. That said, Microsoft’s hybrid laptop and tablet business actually experienced a 9% growth. All’s well that ends well as they say, but Microsoft still has a few issues to resolve.
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