Microsoft has once again pleased Wall Street after its latest financials showed the firm benefited from its strong cloud growth.

Microsoft of course won the Pentagon’s lucrative JEDI contract last year, but it will be a while before it reaps the financial benefits of that.

Microsoft pointed out that Azure grew 62 percent in the fiscal second quarter, but it should be noted that this was down from a 76 percent revenue growth rate the year before.

CEO Satya Nadella

Strong financials

Examining the latest financials from Redmond, we can see that Redmond has delivered another strong quarter.

For the second quarter ending 31 December, Microsoft posted a net profit of $11.6bn, up from $8.4bn in the same year-ago quarter.

Revenue for the period rose to $36.9bn from $32.5bn a year earlier.

Breaking down the sales, the Productivity and Business Processes division (Redmond products that include productivity, communication, and information services) posted a quarterly revenue of $11.8bn.

The Intelligent Cloud unit (enterprise cloud) delivered $11.9bn and the ‘More Personal Computing’ division (PC, Xbox etc) posted $13.2bn.

“We are innovating across every layer of our differentiated technology stack and leading in key secular areas that are critical to our customers’ success,” said CEO Satya Nadella.

“Along with our expanding opportunity, we are working to ensure the technology we build is inclusive, trusted and creates a more sustainable world, so every person and every organisation can benefit,” he said.

Earlier this month Microsoft made a tough environmental pledge after it promised to remove “all of the carbon” from the environment that it emitted ever since Redmond was founded back in 1975.

Being carbon neutral is the goal most firms set themselves nowadays.

To be carbon negative, a company must actually remove more carbon from the atmosphere than it emits. Redmond said it will do this using a range of carbon capture and storage technologies.

Cloud challenge

But laudable green pledges aside, Microsoft continues to pose a challenge to the leading cloud service provider Amazon AWS.

In 2019, Microsoft had 22 percent share of the cloud computing infrastructure market, compared with 45 percent at Amazon and 5 percent from Google, Reuters quoted Forrester Research.

“Azure’s renewed growth doesn’t yet pose a threat to AWS’s supremacy in the cloud market, but it does present an opportunity to further close the gap on Amazon and increase its lead over other cloud providers,” Andrew MacMillen of Nucleus Research reportedly said.

Microsoft shares rose 2 percent in after-hours trading, to hit an all time high for the software and cloud giant.

Quiz: How well do you know Microsoft?

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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