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Home Computing

Microsoft’s New Strategy Pays Off With Increased Profits From Office, Servers, And Surface

by Farhan
October 21, 2016
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Microsoft is having a pretty good financial year, or at least that’s what its Q1 2017 results are showing. According the report, CEO Satya Nadella’s strategy of focusing on software and services is paying dividends; although the same cannot really be said for the gaming division.

The company posted a revenue of $20.5 billion (about RM81 billion) for the first quarter of its 2017 financial year, while the net income stood at $4.7 billion (about RM20 billion). Increased income was driven by revenue from Office and Cloud services; with Microsoft’s Azure cloud income jumping by an impressive 116-percent over the same period last year. Office commercial and Office consumer grew by 5- and 8-percent respectively.

microsoft office ios

Surface sales saw similar growth, increasing by 38-percent year-on-year. This was fueled by sales from the Surface Pro 4 and Surface Book; showing that the decision to become a hardware maker is working out for Microsoft.

On the other hand, the smartphone division saw 76-percent drop in revenue. There’s nothing surprising about this number, as Microsoft is dropping its work in the mobile space. Expect this number to continue on a downward trend for a while.

Microsoft Lumia 550 Eyes On 01

Xbox income also dropped by 5-percent. This was despite traffic increasing by 9-percent. The report indicates that sales of the Xbox One console slowed, but was offset by higher software and services revenue. In other words, it sounds like existing Xbox owners are buying more games these days.

Naturally, the good news continued with Microsoft’s share price surging above $60 (about RM252) for the first time since December 1999. If anything, this is a sign that Nadella has righted the ship and given it the stability that Microsoft has been looking for.

ALSO READ:  Microsoft Xbox Announces Strategic Partnership With AMD For Future Xbox Hardware

[Source: Microsoft]

Filed Under microsoftmicrosoft office
Updated 12:56 pm, Fri, 21 October 16
https://lowy.at/Aih0j
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