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

About the author  ⁄ Suril Amin

Suril is a scientist, journalist and obsessive Microsoft observer. He holds an advanced degree in Biotechnology with minors in Biochemistry, Microbiology, and Molecular Biology. Send him tips on twitter: http://www.twitter.com/surilamin

  • Guest

    This is Microsoft’s future and it’s great that we now have quality CEO who see’s it.

    Just need a bit more to sell off the hardware division and we are golden!

    • NGM123

      Yeah, cause this all happened under the new CEOs watch, he planned it, introduced it, bought the product to market and is responsible for its tremendous growth.
      Time U haters just stopped, lets just all move forward gracefully shall we because your bigoted comments are pathetically embarrassing.

      • Bugbog

        I think that’s just ‘SategB’ commenting under ‘Guest’ (seems to vacillate between the two). Every Single Comment he makes he takes a dig at Ballmer. Even now that the guy has gone he won’t let it go.

        • Vương Vi-Nhuyễn – 王微軟

          It’s because Ballmer is awesome, and he’s just jealous that no other company ever head such an awesome Chief Executive Officer at the top. :-P

        • nohone

          He has done it before. A few months ago he made a post as SategB, then made the same post, word for word, as Guest. Then later on there was a back and forth were Guest was agreeing with SategB and vice versa.
          I am followed around from one site to another by a number of people who use different accounts (even though it is all on Disqus) but all use the same language, terminology, catch phrase, and in SategB’s case, sounding like he writes out what he wants to say, then uses a thesaurus on every word to make himself sound more intelligent and it just ends up being a discordant, jumbled mess.

          • Bugbog

            sponge people just h have to much time!?

      • Martyn Metalous

        Hang on, the CEO was in charge of Azure, this is where he came from…

        • NGM123

          Yes, and who was in charge of him?

          • Martyn Metalous

            So you’re telling me Ballmer, a Salesman not an engineer, worked out Azure and how it should work, made it such a huge success.
            Whilst I don’t think Ballmer was a great CEO, come on…

          • NGM123

            I didn’t say any of that nor did I say Ballmer was a great CEO, all I said was time you haters stopped.
            Fire, ready, aim !

          • Guest

            As soon as he is off the board and can inflict no more harm on to the company and, moreover, the hard working passionate employees of Microsoft, I will give your request serious consideration.

        • http://twitter.com/surilamin surilamin

          Nadella was only in charge of Azure for about 3 years, and Scott Gu joined Azure soon after. Nadella was deep on the dynamics/Bing advertising side for quite some time,

  • tofferne

    I’m very happy to discover Microsoft is back on the track, great, and the future is interesting, we have a major development and quality products in front of us – amazing.

  • http://yourig.livejournal.com/ ZloiYuri

    If they are so profitable – why they giving just 7 Gb OneDrive to users (plus 3Gb extra for some steps). And price for us is incompetent, extra-high and stupid. Greed is a politics of very profitable company. They started from 25 Gb, then reduced to shameful 7 gb. It’s unfair. Especially they giving 10 gb to shitdroid users without any extra moves. I think they HAVE to back 25 gb to EVERY WP user.