With jumps in revenue across almost all services, Microsoft is riding high on the back of digital transformation and hybrid working.
Microsoft’s pandemic-era lift shows no sign of slowing, with the software giant reporting a net income of $20 billion USD on revenues of $45.3 billion in the quarter ending September 30. Net income rose by an incredible 48 percent and revenues soared by 22 percent.
“Digital technology is a deflationary force in an inflationary economy,” Microsoft CEO Satya Nadella said of the quarter. “Businesses—small and large—can improve productivity and the affordability of their products and services by building tech intensity. The Microsoft Cloud delivers the end-to-end platforms and tools organizations need to navigate this time of transition and change.”
Of Microsoft’s three main business units, Intelligent Cloud (Azure) the superstar, with $17 billion USD in revenues, a gain of 31 percent year-over-year (YOY). Productivity and Business Processes — e.g. Microsoft 365 — delivered $15 billion USD in revenues, up 22 percent. And Personal Computing was again the laggard, with the business responsible for Windows, Surface, and Xbox hitting $13.3 billion USD in revenues, up 12 percent.
Microsoft is among tech companies that have benefited most from the sustained shift to working-from-home and remote schooling that followed the outbreak of Covid-19.
Companies and consumers embracing digital services that run on the cloud have been at the center of its growth. Demand for personal computers, many using the company’s Windows software, has surged over the last 18 months as has demand for Microsoft’s latest Xbox video game consoles.
In the quarter, Microsoft introduced new Surface PCs, said it was acquiring security start-ups CloudKnox and RiskIQ and announced plans to increase the cost of commercial Office 365 subscriptions. The company also hired Amazon cloud executive Charlie Bell to work on cybersecurity and committed to spending more on security research and development.