The Cloud Gives Microsoft Huge Profits

Microsoft released its third quarter (Q3) earnings earlier today for fiscal year 2014 (FY14). This is the first quarter under new CEO Satya Nadella. The earnings report contained a number of interesting pieces of the enterprise side of Microsoft is doing.

Windows Azure grew over 150% in the third quarter. Windows volume licensing was up 11% with business customers. Lync, SharePoint, and Exchange, our productivity server offerings, collectively grew double-digits and office commercial revenue was up 6%. Server product revenue up 10%. Total commercial licensing revenue grew 3% to 10.32 billion. SQL server revenue grew 15%.

Other commercial revenue was up 31% to $1.90 billion. Commercial cloud revenue grew 101% with Office 365 growing 100% and Windows Azure revenue growing 150%. Gross margins were up 6% to 80% gross margins!

All this contributed to commercial revenue of $12.23 billion, up 7%. Compare this to Devices and Consumer with revenue of $8.30 billion (up 12%).  The enterprise and cloud business remains highly profitable for Microsoft.

Source: Microsoft