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Shift to Cloud-based Products and Services Fares well for Microsoft

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Published on : Jul 21, 2017

Microsoft Corp has saw a profit in the latest quarter that also exceeded analysts’ estimates, driven by the rising demand for the company’s internet-based services and software products. Profits in the fourth fiscal quarter of the year significantly increased and the company’s adjusted sales increased by 9% as the demand for Azure cloud services almost doubled.

This looks like a positive news for the company, which is reshaping its structure to focus more on the cloud-computing sector and is introducing new services related to the Office 365 online productivity apps and Azure. Sales of Azure increased by 97% while the sales of commercial Office 365, the cloud-based versions of Microsoft’s Office suit of productivity software, increased 43% over the period. The move to these new areas required the company to undertake a massive restructuring of its sales force earlier this month.

Company’s stock has witnessed a record rise of 33% in the past year, demonstrating that the changes are proving to be right. The company posted a massive rise in revenue from its cloud products, along with a wider margin for the business. Shareholders are hopeful about the company being ahead of some of the other leading technology companies that are still in the transitionary phase.

Microsoft had cut thousands of jobs in the marketing and sales divisions earlier this month to focus more on selling cloud and other new products such as data analytics and artificial intelligence tools. The restructuring endured the company costs of US$306 mn in the year’s fiscal fourth quarter that ended on June 30.