Microsoft posted it’s Q2 2018 financial results today, reflecting a revenue growth for its Azure cloud service of 98% year-over-year. Revenue for the quarter was $28.9 billion with a net income of $7.5 billion.
The report showed Intelligent Cloud revenue of $1.3 billion during the quarter with sessions growth of over 20% for the fifth consecutive quarter. This included a growth in revenue for Microsoft server products of 18%. This was driven by Azure’s 98% year-over-year gain in constant currency.
Microsoft’s Investment in the Cloud Pays Off
These numbers reflect Microsoft’s continued investment in the Cloud. Over the past year, Microsoft has announced numerous partnerships, deals, and investments that show that the Redmond-based tech giant is betting heavily on the cloud as a main source of revenue moving forward.
Azure isn’t the only cloud-based service Microsoft is turning a profit with. Microsoft Office 365, a modern take on the classic Office Suite with cloud-powered application and flexibility, now hosts 29.2 million consumer subscribers and a 12% revenue increase for consumer products and cloud services. Office 365 Commercial yielded a 41% growth year-over-year.
Dynamics 365, Microsoft’s product line of cloud-connected enterprise resource planning (ERP) and customer relationship management (CRM) applications also received strong gains. Its year-over-year growth is listed at 67%.
Enterprise services revenue also increased by 5%, and Microsoft notes the change was driven by an uptick in Premier Support Services.
As a result of the new report, Microsoft’s stock hit an all-time high of $96.07 before dipping slightly to $94.30 as of the time of this article’s writing.
A Look to the Future
Microsoft has been investing heavily in its cloud strategy over the past several years. As recently as this week, Microsoft announced plans to reduce the costs of its Azure Standard support plan from $300 to $100. Additionally, it revised its critical case response time from two hours to one.
Plans are also in the works to triple Microsoft Azure’s presence in China, an area currently dominated by Alibaba.
In December of 2017, Microsoft launched Azure Stack in India, a rapidly-growing market with an estimated $100 billion worth of business opportunities.
In the same month, Microsoft announced a new cloud-based service that simplifies how enterprises build and manage IoT apps in the cloud. This service is called IoT Central.
Microsoft has been transitioning its focus away from traditional, locally-installed licensed programs to cloud-based products and services for some time. The latest earning statements stand as evidence that Microsoft’s investment in the cloud continues to pay off as more enterprises look towards the cloud for their IT infrastructure.