In a shift towards a computing market-first strategy, Microsoft on Wednesday reported sales from its Azure cloud computing unit on a quarterly basis for the first time, providing a direct comparison to its top rivals Amazon and Alphabet’s Google.
As per Microsoft, Azure had USD 29.4 billion in sales in its most recently ended quarter and USD 101.9 billion in sales in its most recent fiscal year, which ended on June 30. The latest tally now places the Satya Nadella-led firm just behind Amazon, whose cloud sales were USD 42.2 billion in its most recent quarter.
Microsoft has taken a lead over Google, which reported USD 24.8 billion in cloud sales in its most recent quarter.
Microsoft, from now onwards, will move from three reporting segments to two.
While the first one will be called “Agents and Infra”, which will include the company’s cloud computing services, along with its sales from AI-based software and its revenue from more traditional business software, the other one has been given the name of “Devices and Consumer”, which will club together the tech giant’s Windows operating system, its Xbox gaming unit and its advertising sales across both its Bing search engine and popular business-focused social networking site LinkedIn.
While announcing the change and publishing the results of the Azure division, Nadella remarked, “There’s no question AI represents a profound shift in both technology and business. It is changing what we build and how we operate, and it is blurring the boundaries between our products and reshaping our business models.”
Microsoft also updated the quarterly forecast it gave investors in August.
While the new ratio stood slightly lower than the tech giant’s Azure revenue forecast, as per Nadella, the changes reflected the move of some sales from GitHub, its code-hosting service, which were previously grouped with Azure.
GitHub will now be grouped along with Microsoft’s M365 Cloud software businesses, which includes most of its advanced AI offerings.
“Microsoft’s overall current quarter outlook remains unchanged,” the tech giant said.
In its pursuit of aggressively cashing on the ongoing AI boom, Microsoft has emerged as a major cloud computing provider to Sam Altman-led OpenAI, which exclusively used the tech giant’s resources for training its models until changes in the terms of its deal allowed it to work with Amazon Web Services (AWS) and others.