Microsoft cloud sales get big boost in demand from lockdown workers

Microsoft cloud sales get big boost in demand from lockdown workers

Microsoft said quarterly sales and profit rose, buoyed by demand for internet-based software and cloud services needed to accommodate a shift to remote working during the coronavirus crisis. Windows Virtual Desktop has quickly become a solution that many companies are turning too as they try to spin up remote tools that let their employees keep working with the security and apps that they had been using on local hardware.

"We've seen two years' worth of digital transformation in two months", Microsoft CEO Satya Nadella said.

The company also reported a new milestone for Microsoft Teams, which now has 75 million daily active users, up 70 per cent from last month's figure of 44 million daily active users.

Microsoft said revenue for its "commercial cloud", a combination of Azure and the cloud-based versions of software such as Office, rose 39 percent to $13.3 billion (roughly Rs. 99,700 crores).

"We saw more than 200 million meeting participants in a single day this month, generating more than 4.1 billion meeting minutes", Nadella informed during the analysts' call after reporting a profitable third quarter results late Wednesday. Right after reporting its results, Microsoft shares were up around 1.5%.

However, calendar Q1 (Q3 F2020 for Microsoft) only included a portion of the world's COVID-19 response. Analysts surveyed by FactSet expected $1.28 of per-share earnings and sales of $33.76 billion for the quarter.

Ric Opal, principal and national GTM and strategic partnerships leader at BDO Digital, said his company has also seen a major increase in demand for WVD-and Opal said it has been "impressive" how WVD has been able to meet sudden customer needs.

Microsoft saw $1.40 in earnings per share in the quarter more than the $1.28 earning per share estimated by analysts.

Operating income was $13.0 billion and increased 25%. The company also said its gaming service got a boost in engagement as homebound users sought entertainment. For cloud and traditional sales of Office, software revenue climbed to $11.7 billion.

"Now more than ever, organizations are relying on Azure to stay up and running, driving increased usage", Nadella said, noting Microsoft has "more datacenter regions than any other cloud provider - and this quarter we announced new regions in Mexico as well as in Spain".

On the consumer side of things, Microsoft's More Personal Computing business generated $11 billion in revenue, growing 3% year-over-year. Meanwhile, revenues in the Intelligent Cloud segment were up 27 percent to $12.3 billion. In the final weeks of the quarter, there was a slowdown in transactional licensing, particularly in small and medium businesses, and a reduction in advertising spend in LinkedIn.

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