Microsoft is coming for Amazon’s cloud crown

Microsoft's Satya Nadella

Microsoft’s successes in the cloud may look like storm clouds for its competitors.

Quarterly earnings (July 18) beat analysts’ expectations across the board today (July 18), as the company posted $33.72 billion in revenue—a jump of 12% over the same period last year.

Microsoft is the only company—tech or otherwise—with a market capitalization over $1 trillion. Although Apple recently topped that figure, a string of underwhelming earnings reports (by the company’s high standards) have seen it drop below Microsoft and Amazon.

Part of the reason for Microsoft’s resurgence is its burgeoning, and seemingly stable, cloud-services business.

Microsoft breaks its business down into three groupings—Productivity and Business Processes (which includes Office, LinkedIn, and Dynamics 365 software), Intelligent Cloud (severs and hosting software for enterprise cloud services), and More Personal Computing (Windows, Xbox, and Surface hardware). All three sections saw increases over the same period last year, with Intelligent Cloud leading the way.

Intelligent Cloud revenue was $11.4 billion for the fourth quarter of fiscal 2019, a jump of 19% over the same quarter last year.

Although it’s tough to compare directly, given that many of Microsoft’s cloud services intertwine between its three business segments, Amazon generated roughly $7.7 billion in cloud-related revenue in its most recently reported quarter, a jump of 41% over the same period the year before. Amazon’s cloud revenue has been solidly growing for years, but analysts are expecting that the next jump may be a bit smaller when it next reports earnings on July 25.

Microsoft’s stock has been on a tear, up more than 33% since the beginning of the year. Investors were happy with the revenue reported today. Shares were up about 1.5% to $138 in after-hours trading.





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