Dive Brief:
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Microsoft reported better-than-expected first quarter earnings Thursday, boosted by a strong showing in its cloud business.
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Revenue from the company's Azure cloud offering grew 116% year-over-year for the quarter. The company’s entire cloud segment brought in $6.38 billion for the period.
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The company's revenue of $22.33 billion bested the $21.71 billion Thomson Reuters predicted.
Dive Insight:
“Our first-quarter results showed continued demand for our cloud-based services," said Amy Hood, Microsoft’s executive vice president and chief financial officer, in a company statement.
Microsoft is gaining on Amazon Web Services, with more than 120,000 new Azure subscriptions each month and 1.6 million production databases now hosted in Azure, Scott Guthrie, Microsoft's executive vice president of Cloud and Enterprise, said last month. Amazon Web Services reported $2.9 billion in sales in its last quarter -- up 58% year-over-year, while IBM reported its cloud revenue was up 30% for the quarter year over year, reaching $11.6 billion over the past 12 months.
With worldwide revenues from cloud public cloud services expected to reach $195 billion by 2020 (from $96.5 billion this year) according to an IDC report published in August, both Microsoft and AWS have plenty of room to grow.
