- Data from switch to new segments sheds light on cloud revenue
- Azure revenue in recent quarter was up slightly, CFO Hood says
Microsoft Corp.’s latest realignment of its financial reports made at least one thing clearer: sales for Azure cloud services.
When the software maker announced a shift to three new reporting segments last month, its disclosures about how to translate the old divisions to the new included just enough information to roughly calculate Azure’s revenue. That figure in the fiscal fourth quarter, which ended June 30, was about $400 million in sales. Rival Amazon.com Inc.’s Amazon Web Services posted $1.82 billion for the same period.
And what about the most recent quarter? Microsoft didn’t give the precise information needed to calculate Azure sales this time, but Chief Financial Officer Amy Hood said the business was up a little from the previous period.
Microsoft’s Azure revenue is a much guessed at and closely-guarded secret. Given the rapid growth in cloud services and Azure specifically -- the unit doubled in sales in the most recent quarter -- and Amazon’s decision to start breaking out specific results for its competing Amazon Web Services business, Azure’s revenue has come under greater scrutiny. The company doesn’t disclose revenue for that business alone, leaving analysts estimating instead.
That headline number is somewhat less than what Daniel Ives, an analyst at FBR Capital Markets anticipated, since he estimates that Azure’s annual revenue totals about $2 billion, while Azure’s quarterly sales translate into annualized revenue of $1.6 billion. Still, Ives expects rapid growth this year: "By then end of fiscal year 2016, I expect it to be more like $3 billion" on an annualized basis, he said.
As for Office 365, the cloud version of Microsoft’s popular Office apps, consumer sales were about $230 million for the June quarter. On the commercial side, the best approximation is a number that includes revenue from cloud customer-management software -- yet there isn’t enough data to specify how much from each. Those brought in a combined $1.2 billion in sales in the June quarter, the data show.
Will Microsoft break out these numbers going forward? The software maker declined to comment.