Microsoft's results show Windows Phone really is dead

Satya Nadella - Microsoft Press Centre

Microsoft's cloud revenues hit $7 billion in its fourth financial quarter, despite overall revenue falling from $22 billion this time last year to $20 billion.

Breaking it down by Microsoft's business units, its productivity and business processes division was up five per cent year-on-year to $7 billion thanks to small gains in Office 365 subscriptions, Intelligent Cloud was up seven per cent to $6.7 billion, and Personal Computing was down four per cent to $8.9 billion.

Azure, its public cloud, had a growth rate of 102 per cent, doubling its revenues, though Microsoft did not break out actual figures for cloud, instead bundling them with its server software business.

That said, despite an increasing revenue, operating profit in its intelligent cloud businesses decreased 17 per cent to $2.19 billion in the quarter. This fall was blamed on higher research, development, sales and marketing costs.

Woeful sales of Windows smartphones saw revenue plunge by 71 per cent. The figure was slightly offset by Surface Pro sales, though, which were up by nine per cent.

Microsoft reported Windows OEM non-Pro revenue increased 27 per cent and Windows OEM Pro revenue increased two per cent.

Advertising revenues from search also rose 16 per cent.

"This past year was pivotal in both our own transformation and in partnering with our customers who are navigating their own digital transformations," said CEO Satya Nadella in a statement. "The Microsoft cloud is seeing significant customer momentum and we're well positioned to reach new opportunities in the year ahead."

Rene Millman

Rene Millman is a freelance writer and broadcaster who covers cybersecurity, AI, IoT, and the cloud. He also works as a contributing analyst at GigaOm and has previously worked as an analyst for Gartner covering the infrastructure market. He has made numerous television appearances to give his views and expertise on technology trends and companies that affect and shape our lives. You can follow Rene Millman on Twitter.