Company reveals successes in Azure, Office 365 and enterprise services during Q2 earnings report

Microsoft has announced impressive Q2 results for its fiscal year 2016, driven largely by success in the cloud.

Satya Nadella told investors in the company’s quarterly earnings call, transcribed by Seeking Alpha that its commercial cloud run rate “surpassed $9.4 billion, up over 70 per cent year over year and almost halfway to our [2018] goal of $20 billion”.

Nadella also stated that Microsoft had almost doubled its cloud customers over the past 12 months (I.e. calendar year 2015). Office 365 revenue growth alone hit nearly 70 per cent, with Office consumer subscribers increasing to 20.6 million.

“We are delivering new innovation and seeing new opportunity with Office 365,” said Nadella, citing mobile platforms as a particular area for growth.

“There are … 30 million iOS and Android active devices running Outlook. Office 365 commercial revenue grew nearly 70 per cent in constant currency while seats grew 59 per cent. It is clear customers value the ongoing innovation we are delivering in Office 365 and this allows us to advance further into markets like voice and information protection,” he explained.

Dynamics was also said by Nadella to be “contributing to [Microsoft’s] growth in the cloud”, growing 11 per cent year-on-year.

“This quarter we released major updates to Dynamics NAV and Dynamics CRM, both of which deliver enhancements in mobility, insights and organisational productivity, as well as deeper integration with Azure and Office 365,” said Nadella.

Three quarters of Microsoft’s CRM customers are, Nadella said, choosing to deploy in the cloud.

Nadella said that the opportunity for Microsoft in enterprise cloud “is massive, larger than any market we have ever participated in”.

“Last quarter, I reflected on how we are now one of the two leaders in the space. At the same time, we are the only one in this market providing SaaS, PaaS, IaaS and hybrid cloud at scale,” said Nadella.

“Our unique approach is resonating. Our cloud architecture reflects real world distributed cloud computing needs and services that enable businesses to convert data into intelligence and drive business transformation,” he added.

Indeed, Intelligent Cloud, which includes server products, business cloud services and Azure, grew five per cent overall, with Azure seeing the greatest year-on-year increase (140 per cent) and over a third of Fortune 500 companies choosing Microsoft Enterprise Mobility solutions – a threefold increase.

Microsoft has, over the past few days, introduced several new enterprise collaboration features as well, the effect of which will be seen in the company’s Q3 2016 report when it is announced in spring.

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