Microsoft's cloud division drove the company's strong earnings in the fourth quarter of its 2017 fiscal year.
The company's cloud computing division was responsible for 13 percent of its revenue growth in the fourth quarter of the 2017 fiscal year. Overall, the company earned $24.7 billion in revenue compared to the projected sum of $24.3 billion. News of these strong earnings also had an effect on the company's stock, which saw prices rise by about 1 percent to the price of roughly $75 per share.
Cloud And Productivity Lead The Way
The two biggest drivers of Microsoft's growth were its cloud computing and productivity departments. The cloud division made up of Azure and the Windows Server package brought in $7.43 billion. In total, the division saw an 11 percent increase compared to the previous year. Such news was seen as a positive by investors since cloud computing is considered one of the industry's next big innovation. Of course, it isn't all good news on the cloud front. Microsoft recently announced that it was eliminating sales positions due to a lack of need and the cloud is one factor in those job losses.
Another major driver of growth was, of course, Microsoft Office included in the Productivity and Business Processes department. This segment grew by 21 percent and earned the company $8.4 billion in revenue. This revenue includes sales of both physical boxed copies of Microsoft Office and subscriptions to cloud-based Office 365 program.
A Lagging Phone Divison
All was not good news for Microsoft as the company reported that its personal computing segment, which includes the Windows, Xbox, and Surface brands, fell by about 2 percent to 8.8 billion. The company blamed the decline on weak sales from its ill-fated Windows Phone division, which dragged down the rest of the department. Such comments may indicate that Microsoft is planning on abandoning its failing smartphones, at least for now.
Despite its best efforts, Windows Phones have never really taken off and Microsoft has failed to make a dent in the market dominated by Android and iOS users. There have been rumors that it will release a Surface Phone sometime within next year, but so far, the company has made no formal announcements. It is possible that it will simply concede the market to the likes of Samsung and Apple. However, given the fact that smartphones make up a large part of the computer-consumer base, it is unlikely that Microsoft will give up its dreams of making Windows Mobile the third smartphone OS.
Speculation about the Windows Phone aside, this has been a strong quarter for Microsoft with the company's investment in cloud computing showing a clear benefit.