Microsoft reported net profits of almost $5.5 billion on July 19. The news surprised investors in view of the Nokia cellphone disaster and loss of revenue for the Windows 10.
The business segment that pushed Microsoft to profitability is Azure, its cloud service component. The financial statement reported a revenue loss of four percent in its Personal Computing segment, according to The Verge. The largest losses however were incurred by its mobile phones division. The Windows OS or its license is usually sold to the public. However, with Windows 10, Microsoft decided to offer it as a free upgrade. The free upgrade period is set to expire by the end of this month.
Its cloud service revenue however, continues to double over the years. Microsoft CEO Satya Nadella is pleased that Azure provided a very big silver lining for the company. Microsoft's cloud services however, are not as large as Amazon, according to the Wall Street Journal. Still, the report indicates that the Redmond Company is achieving great success in selling cloud services.
Aside from cloud service, incomes from other Microsoft products like Surface and Xbox One have also risen. Compared to last year, Surface sales rose by almost ten percent. Xbox Live saw the number of tis customers increasing by more than 30 percent this year.
Microsoft CFO Amy Hood explained that the increase in income was due to the company's expansion to markets all over the world. She also said that focusing their promotion on certain key products also made a positive effect. Hood also thanked their sales people for a job well done.
Still, providing cloud services is seen as the major source of revenue not only for Microsoft but also for other big companies such as Amazon and Google. Competition among the three is expected to be fierce. All of them are expected to invest heavily in providing cloud services to a growing base of eager customers.
