Tuesday 27 April 2021 9:30 pm

Microsoft sees continued demand for cloud services

It was another stellar quarter for Microsoft as it continued to benefit from the pandemic-induced shift to the cloud.

The tech heavyweight beat Wall Street expectations for quarterly revenue, rising 19 per cent to $41.7bn in the three months to March just ahead of analysts’ estimates of $41.03bn. 

Last quarter Microsoft reported a 17 per cent rise in revenues, seeing sales rise above $40bn for the first time to $43.1bn. 

The shift to remote working has seen demand for Microsoft’s cloud services soar and today said revenue in its “Intelligent Cloud” division rose 23 per cent to $15.1bn, with 50 per cent growth in Azure. 

“Over a year into the pandemic, digital adoption curves aren’t slowing down. They’re accelerating, and it’s just the beginning,” chief executive Satya Nadella said. “We are building the cloud for the next decade, expanding our addressable market and innovating across every layer of the tech stack to help our customers be resilient and transform.”

Sales in its personal computing division, which includes software and consoles, jumped 19 per cent to $13bn. Windows OEM revenue rose 10 per cent while its Xbox consoles increased 34 per cent in the quarter. 

Microsoft continues to benefit from the shift to the cloud which has accelerated across all industries over the past year,” NIck McQuire, chief of research at CSS Insight said. “The “flywheel effect” of increasing integration between its portfolio of products, has benefited Microsoft perhaps more than any other tech firm at the moment.” 

Earlier this month Microsoft announced plans to buy AI health firm Nuance Communications for $19.7bn as it looks to bolster its healthcare offering. 

The merger builds on a partnership inked between the two companies in 2019 to combine the health firm’s technology with Microsoft’s cloud services.

It also marks increased demand for health tech services after the Covid-19 pandemic sparked a shift to virtual medical consultations.