Dollars ( technology companies seem to do these days, software giant Microsoft has cited its investment in ‘intelligent edge’ and ‘intelligent cloud’ technology as a key driver behind its strong 2018 financials.

The company’s Q4 results saw revenue rise to $30.1bn, an increase of 17% and net income was $8.9bn (GAAP) and $8.8bn (non-GAAP).

Satya Nadella, CEO, Microsoft
Satya Nadella, CEO, Microsoft

Microsoft CEO, Satya Nadella, said “We had an incredible year, surpassing $100 billion in revenue as a result of our teams’ relentless focus on customer success and the trust customers are placing in Microsoft,”

Breaking it down

If you go more granular with the results, the following nuggets are highlighted by Microsoft:

Revenue in Productivity and Business Processes was $9.7 billion, an increase of 13%, with the following highlights:

• Office commercial products and cloud services revenue increased 10% which was driven by Office 365 commercial revenue growing 38%
• Office consumer products and cloud services revenue increased 8% and Office 365 consumer subscribers increased to 31.4 million
• LinkedIn revenue increased 37%

Revenue in Intelligent Cloud was $9.6 billion, an increase of 23%, with the following highlights:

• Server products and cloud services revenue increased 26% driven by Azure revenue growth of 89%
• Enterprise Services revenue increased 8%

Revenue in More Personal Computing was $10.8 billion, an increase of 17%, with the following business highlights:

• Windows OEM revenue increased 7%
• Windows commercial products and cloud services revenue increased 23% driven by an increased volume of multi-year agreements
• Gaming revenue increased 39% with Xbox software and services showing a revenue growth of 36% – mainly from third party title strength
• Surface revenue increased 25%

Fiscal 2018 overall

For its fiscal year Microsoft posted revenue of $110.4bn (an increase of 14%) with an operating income of $35.1bn. Net income was $16.6bn (GAAP) and $30.3bn (non-GAAP).

So, what does this mean?

Simply put, Microsoft’s redefining of itself under Nadella’s leadership is very much on track. If you look at other firms’ performance in 2018, you will see that not all finished the year on such a high. Take Oracle as an example, total revenue for 2018 was up 6% to $39.8bn with the company citing cloud services revenue as growing, but cloud licences as falling. Net income (GAAP) was $3.8bn and $13.2bn (non-GAAP) for the year.

Larry Ellison, chairman and CTO of Oracle, looked to 2019 as he predicted that many large customers have now started porting their Oracle databases to the Oracle Cloud. He used AT&T as an example of an organisation which was “moving thousands of databases and tens of thousands of terabytes of data into the Oracle Cloud.”

Previous articleCloudBees Core is now a Kubernetes-native application
Next articleHas Progressus revamped its PSA solution for Dynamics 365?
Neil Fawcett
Cut him in half and the word technologist runs through Neil Fawcett’s core. Starting life as an engineer, specialising in the world of home computing, Neil the move to writing in 1985 and as the expression goes… never looked back. He was key to moving Computer Weekly away from its bias as a mainframe/minicomputer news title and propelled it into the exciting world of personal computing, breaking many an exclusive story. Following his tenure at CW he went on to work for various other publications, including participating in the UK launch of Information Week. During this time, he played a pivotal role in establishing custom publishing units designed to work alongside vendors to help define end-user publications and campaigns. Neil’s ability to take complex technology subjects and deliver digestible content frequently saw him appear on the likes of the national newspapers, the BBC and Sky, and often found himself delivering speeches to audiences around the world. With numerous books under his belt, Neil took time out in the new millennium to pursue a passion for toys/gaming and military history as he set up a manufacturing company with a global reach. He is now thrilled to have come full-circle and be back writing about his core passion: technology!


Please enter your comment!
Please enter your name here