Microsoft reaps rewards of shift in focus to its cloud business

Chief executive Satya Nadella. Picture: Microsoft.

Microsoft has reported strong fourth-quarter earnings on the back of its fast-growing cloud computing business, strengthening the view that this once-stagnant company has found new momentum.

The results were the clearest sign yet that the strategy put in place by chief executive Satya Nadella when he assumed the top job in 2014 is paying off.

He has shifted the company’s focus away from a dying personal computer software business and reinventing it as a provider of cloud computing and subscription-based software.

“Our technology world view of an intelligent cloud and an intelligent edge is resonating with customers everywhere,” Nadella said on the company’s earnings conference call with investors yesterday.

Most notably, revenue from the cloud unit, which includes the flagship Azure platform and server products, rose about 11 percent to $7.43 billion in the fiscal fourth quarter ended 30 June. Revenue from Azure, which competes directly with Amazon.com’s market-leading AWS division, nearly doubled in the quarter.

In a bid to continue this momentum, Microsoft last week launched Azure Stack, a new service that allows customers to run a local version of the company’s cloud technology.