Microsoft's cloud business slows, casts shadow over results

(Reuters) - Microsoft's Azure cloud business showed slower quarterly growth even as the software maker topped estimates for profit and revenue, indicating that the company may be facing intense competition in its fastest-growing business. Revenue from Azure increased 59% in the quarter ended Sept. 30, but came in well below last year's 76% growth.

Reuters October 24, 2019 03:07:42 IST
Microsoft's cloud business slows, casts shadow over results

Microsofts cloud business slows casts shadow over results

(Reuters) - Microsoft's Azure cloud business showed slower quarterly growth even as the software maker topped estimates for profit and revenue, indicating that the company may be facing intense competition in its fastest-growing business.

Revenue from Azure increased 59% in the quarter ended Sept. 30, but came in well below last year's 76% growth.

Since Chief Executive Satya Nadella took over in 2014, Microsoft has been diversifying from its Windows operating system software, and has focused on its cloud services, in which customers move their computing work to data centers managed by Microsoft.

Strength in that business powered Microsoft's market value past $1 trillion (£776.10 billion) for the first time in April. However, the business faces intense competition from Amazon.com's AWS and Alphabet's Google.

Worldwide spending on cloud infrastructure services increased nearly 38% year-on-year in the calendar second quarter of 2019 to $26.3 billion, according to data from research firm Canalys. Amazon Web Services still dominates the market with a 31.5% share, with Microsoft coming in second with an 18.1% hold over the market.

Microsoft's shares, up 34% for the year, were 0.5% lower in volatile after market trading.

Revenue from the tech giant's personal computing division, its largest by revenue, rose 4% to $11.13 billion. The unit includes Windows software, Xbox gaming consoles, online search advertising and Surface personal computers.

The software maker's net income rose 21% to $10.68 billion, or $1.38 per share, while total revenue rose 14% to $33.06 billion. (https://bit.ly/2W9G9Bc)

Analysts had expected a profit of $1.25 per share on revenue of $32.23 billion, according to IBES data from Refinitiv.

For a graphic on Microsoft: A Walk In The Clouds:

https://fingfx.thomsonreuters.com/gfx/editorcharts/MICROSOFT-RESULTS/0H001QXEJ91N/eikon.png

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Saumyadeb Chakrabarty)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.