In an unprecedented move, Microsoft announced the revenue of its cloud computing platform Azure in US dollars, ending years of reliance on percentage growth rates or vague references to revenue levels. The platform recorded revenue of $33.2 billion during the quarter from July to September, achieving a year-over-year growth of 48%.
What does this disclosure mean?
This financial disclosure allows investors and analysts to make a direct and more accurate comparison between the performance of Azure and its main competitors, such as Amazon Web Services (AWS) and Google Cloud, which already commit to disclosing their revenue in dollars on a quarterly basis. In a related context, Alphabet announced that Google Cloud revenue reached $30.7 billion in the same period, placing Azure slightly ahead, although Google Cloud recorded a growth rate nearly double that of Azure.
The importance of Azure in Microsoft's structure
Azure is currently Microsoft's largest and fastest-growing product line, accounting for approximately 36% of the company's total quarterly revenue of $92.3 billion. Companies rely on this platform to rent computing power, run Software as a Service (SaaS) applications, and build and operate artificial intelligence models.
Azure's revenue exceeded analysts' expectations, which pointed to $32.3 billion, and the 48% growth rate also outperformed the previous forecasts of the company's CFO, Amy Hood, which ranged between 44% and 45%.
Restructuring of segments
These figures come in conjunction with Microsoft's introduction of a new structure for its business segments, where Azure has been integrated into a new segment called Agents and Infra. This segment, which combines Azure with Microsoft 365 cloud business, achieved total revenue of $76.8 billion, an increase of 25% from the previous year.
As markets await Amazon's announcement of its financial results, competition in the cloud computing market remains intense, and with all major players shifting to disclosing their figures in dollars, the comparison between the efficiency and growth of these platforms has become clearer than ever before.