Microsoft on Track to hit $20 Billion Cloud Revenue Target

Microsoft on Track to hit $20 Billion Cloud Revenue Target

Starting in September of last year, we published a series of five blog posts presenting best-practice advice covering strategic use of the cloud.

Based on an extensive review of current research on cloud adoption trends around the world, The Cloud (Part 1) concluded that a tipping point had been reached. Over the next few years, worldwide cloud adoption would increase exponentially.

If anyone doubts that the tipping point has been reached, please take a look at Figure 1 below showing projected cloud revenue at Microsoft, based on a calculation of annualized revenue run rate (revenues in the final month of the quarter multiplied by 12).

The company’s commercial cloud revenue run rate already exceeds $14 billion and is on target to reach $20 billion by fiscal 2018. The three main cloud based revenue streams are Office 365, Dynamics 365, and Azure, Microsoft’s cloud-based computing platform.

Office 365 revenue increased by 47% in the most recent quarter, with Dynamics 365 paid seats more than doubling year-over-year. Eighty per cent of the company’s enterprise customers chose Dynamics 365.

In fiscal 2Q17, Microsoft’s Azure revenues rose by a staggering 93%, with computing usage more than doubling on a year-over-year basis.

In terms of overall public adoption, Azure grew at a much faster rate than any of its major competitors – Amazon Web Services, Google Cloud, IBM and Oracle.

Based on these statistics, Microsoft is well on its way to achieving the goal set for its cloud offerings – $20 billion plus in cloud revenues by fiscal 2018.

The company’s continued success in the cloud is posing a major threat to Amazon’s (AMZN) early dominance of the cloud market.

Figure 1: Microsoft Projected Cloud Revenue

Figure 1: Microsoft Projected Cloud Revenue

You can read more here – How Office 365 Could Determine Microsoft’s Success in the Cloud