Microsoft is a company in transition, but exactly how their ascendancy into the cloud has been going has been somewhat unclear, leading to demands by their biggest share holder, ex-CEO Steve Ballmer, for Microsoft to release more numbers so investors could see just how profitable Microsoft’s new businesses are.
Acceding to that pressure Microsoft has now agreed to report 3 new metrics, bringing the total up to 20.
New in the list is Commercial Cloud Gross Margin in Percentage, Windows Commercial Products and Cloud Services Revenue Growth and Gaming Revenue.
Commercial Cloud Gross Margin in Percentage will track the gross margin on its business-focused cloud products, including Microsoft Azure, Office 365, and Dynamics. There are the foundation of Satya Nadella’s new Microsoft and much of their current share price, which nearly doubled under his leadership. Investors and analysts are likely to give it much attention during Microsoft’s next financial report, and should be much more illuminating that Microsoft’s usual “run rate” numbers.
Windows Commercial products and Cloud Services Revenue Growth will track how much more revenue Microsoft has generated from sales of Windows, Windows Server, and related tools to businesses Year over Year. It replaces the previous “Windows volume licensing revenue growth y/y” metric and provide a more meaningful number for analysts due to including off-premise services which may replace on-site Windows servers.
Lastly Gaming revenue is interesting, as Microsoft no longer releases Xbox sales number. It may be that Microsoft hopes sales to the much, much larger Windows 10 ecosystem due to cross-play and other ventures will mean that Xbox hardware will become only a small part of Microsoft’s gaming empire.
While Microsoft is reporting somewhat more detail, they have as of yet not agreed to release full cloud revenue numbers, and it may very well be with all these numbers they hope to conceal and obfuscate as much as they reveal.