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Microsoft's Cloud Bet Continues To Pay Off In Latest Earnings (theverge.com)
In its 2018 financial results, Microsoft reported revenue of $28.9 billion and net income of $7.5 billion. "Revenue has jumped 12 percent year-over-year during the holiday quarter, and the trend of Microsoft's success with the cloud has continued," reports The Verge. "This time around, Azure revenue has increased by a massive 98 percent." From the report: Overall server and cloud services revenue grew 18 percent year-over-year, alongside the massive 98 percent jump in Azure revenue. It's clear Microsoft's future growth and revenue opportunities are with the cloud, so it's no surprise to see the company continually investing there to be competitive with Amazon. Microsoft's Office 365 subscription bet for consumers is also paying off. 29.2 million people are now using Office 365 on the consumer side, with revenue increasing 12 percent year-over-year for Office consumer and cloud. On the commercial side, Office revenue is also up at a 10 percent increase since the same period last year.
I think the 1% Surface line increase begs to question how long Microsoft will continue to develop this line. When you look at OEM Windows too its not the revenue provider it once was. I know Windows continues to help Microsoft sell other services, but with the Surface I think its getting harder to claim this hardware venture as a success.
How does one pronounce "azure"? I've heard AHZ-uhr, ey-ZUHR, Escher, as-YURE and a few others...
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
MSFT stock has been a good bet indeed since Steve took his chair and left.
"In its 2018 financial results, Microsoft reported revenue of $28.9 billion and net income of $7.5 billion."
According to the article:
"GAAP net loss was $(6.3) billion"
Operating income is different from net income.
The future is Windows 10S and Edge (no other browsers allowed) connected clouds at Microsoft, with secure boot and end of support locking out Windows 7 and Linux. You will pay for this future and like it.
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Flash back two years. Similarly vague on concrete numbers back two years ago:
http://www.businessinsider.com/microsoft-azure-vs-aws-revenue-2016-1
"Our server products and cloud services revenue grew $153 million or 3%, driven by revenue growth from Microsoft Azure of 127% and higher revenue from Microsoft SQL Server, offset in part by lower revenue from Windows Server.....But there's no way to tease out how much of that $5.1 billion is Azure versus the older products. "
OK, so lets assume a max case as if *all* of the $153m growth that year was from Azure, that puts Azure at $70 million then, growing to 153 million. And lets just assume last years growth was similar, 100%, puts it at $300 million. And so this years maximum revenue from Azure would be 98% bigger at $600 million.
So the maximum the Azure revenue can be is $600.
Lets compare it to AWS... $14 billion in AWS sales.
https://www.geekwire.com/2017/amazon-web-services-posts-3-5b-revenue-47-last-year/
In other words, Microsoft presents it as catching up (in terms of percentage), but growth doesn't work in percentages, and actually AWS is leaving them behind.
Microsoft grew Azure revenues by $300 million, while Amazon grew AWS revenues in the same period by $1.1 billion. Amazon is increasing its lead.
(Investing 101, learn when a company is trying to mislead you).
Azure cloud revenue was estimated at about 3 billion a year back at the start of 2017. So your maths is using some bad assumptions. you can't make an assumption of $70 million as your starting point as you have no fucking idea how the rest of the division went. There is no way in hell Azure revenue was as low as you are claiming.
Investing 101, when you start with bad assumptions you come to bad conclusions. you should not be investing or giving anyone investment advise.
perhaps use some more modern numbers rather than making garbage guesses to come to garbage conclusions. MS are still a long way behind but they are chipping away at the lead.
https://winbuzzer.com/2018/01/16/report-microsoft-azure-took-4-market-share-aws-last-quarter-xcxwbn/
So they can brag about it.
Do you research.
Get your discount.
I work for a small VAR and other than Office 365, almost nobody is interested in Microsoft cloud systems. We had a guy go whole hog into training and there was little customer interest, which doesn't help his (or anyone else's) training since it's a fairly dynamic offering which seems to evolve quickly.
I have been unimpressed with Office 365. The online tools are missing basic features present in the on-premise version. And the costs are high, once you pass about 40 users on premise is actually cheaper, and more so as your numbers increase.
Microsoft shot itself in the foot with the clusterfuck that was the Windows 8 "no start button" UI - nobody using Windows wanted the Win 7 interface changed significantly, and certainly not in the horrible way Win 8 did it. Win 7 was a good OS, and worked fine for just about any task. Windows 8 was, to put it bluntly, unusable. Almost like somebody sat down and said "lets inflict as much pain and inconvenience on the user as possible". Then, MS wanted everybody to pay again for Windows 10, and imposed all sorts of crap on people with Win 10 - upgrades that happen on their own, telemetry that can't be switched off, privacy settings that seem to do nothing - and so on and so forth. All while giving people a release 10 that was inferior in many ways to release 7, which by this time ran lightning fast on current hardware. Microsoft's CEO comes from a cloud-engineering background and is an "all cloud all the time" sort of guy. Is this good for consumers? No. But it is good for OSX and Linux. I've been on Windows for 20+ years, and I'm also considering going over to Linux. I also don't want my office documents or other personal stuff in anybody's datacenter. So Office 365 is totally unattractive to me, whereas LibreOffice for example is looking better and better to me all the time. Perhaps MS should get a new CEO who isn't cloud-crazy.
Why did the chicken cross the road? Because Elon Musk put an AI chip in its head.
"as you have no fucking idea how the rest of the division went."
I assume they were flat, but Microsoft lists them as growing, (e.g. "Enterprise Services revenue increased 5%"), so it's likely an *overestimate*.
"There is no way in hell Azure revenue was as low as you are claiming.....Azure cloud revenue was estimated at about 3 billion a year"
That would be impossible, it would require the collapse of a lot of other Microsoft businesses:
"Revenue in Intelligent Cloud was $7.8 billion and increased 15%" (or about $1 billion overall).
A 98% increase on a $3 billion Azure business would be ~$3 billion.
i.e. a 1 billion increase = $3 billion Azure increase would require a decline in other business of $2 billion!!... Which business collapsed by $2 billion????
"Enterprise Services" *increased* by 5% according to Microsoft. Enterprise services is a line item, so likely to be equal or more than the cloud services in total (which itself includes Bing, Office 365 etc. did they collapse?? No.).
So Azure is a fraction of a fraction of that $1 billion increase. e.g. $300 million is a reasonable max guess, making Azure a $600 million business at best.
"Investing 101, when you start with bad assumptions you come to bad conclusions."
right back at ya
I think that Walmart's recent (2017) policy of refusal to conduct business with any partner who uses AWS has probably driven a lot of business in the direction of Azure. And big businesses.
Well, that wasn't hard to predict. Give no alternative to people who have been brainwashed into thinking you can't create documents without Microsoft Office and that your computer breaks down if it doesn't use a Microsoft OS. Gee wizz, who would have thought they'd get a lot of customers...?
I wonder how the overall trend looks though. This feels an awful lot like "look here!". I have a feeling they are losing customers in general. Large companies refuse to use Windows 10, I even know of one decently large one which reverted back to Windows 8.1. Additionally, for many clients the OS is getting increasingly irrelevant since the applications they are using all run in the browser anyway. We are rapidly reaching the point where the only ones who really cares about "Windows" as such are the ignorants who never have used anything but Windows and are deathly afraid of becoming irrelevant themselves and gamers, which seem to be a dying breed anyway considering the difficulty to compete for hardware with miners.
That article covers a report thaylt makes estimates based on earnings figures. I doubt that it is very accurate, foe one because Microsoft is vague and devious in how it reports revenue.
So, Azure is included in 'Intelligent Clioud' revenue, which AFAIK also includes *all Office 365* revenue.
There are rumours that licence payments from AWS and Google's GCP, and smaller 'cloud' players is *also* counted as "Azure" revenue, not "Windows Server" revenue.
So a lot of this supposef "claw-back" may just be the result of more Windows work-loads moving from on-prem to non-Azure cloud ...