Microsoft’s cloud bet pushes annual sales over $100 billion

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Microsoft’s guess on the cloud helped propel the corporate to its first $100 billion gross sales yr.

Microsoft (MSFT) mentioned Thursday that it posted $110 billion in gross sales for the 2018 fiscal yr ending in June, a 14% improve over the prior yr. CEO Satya Nadella credited “early investments” in cloud companies for the outcomes.

The corporate’s business cloud enterprise hit $6.9 billion within the final quarter, leaping 53% from the identical interval final yr. That helped push Microsoft’s total quarterly gross sales to $30.1 billion, a 17% improve from a yr in the past.

Beneath Nadella’s management, Microsoft shook up inside operations to prioritize the cloud and demote its legacy enterprise, Home windows. The shift positioned Microsoft close to the entrance of quickly rising know-how phase after years of struggling to compete in smartphones and on-line companies like search.

Microsoft overtook Google (GOOGL) in public cloud market share in 2016 and now ranks second solely to Amazon (AMZN), in response to knowledge from Synergy Analysis Group.

Associated: Walmart and Microsoft group as much as battle Amazon

“It is not a three-horse race,” says Brad Reback, an analyst who tracks Microsoft at Stifel. “It is Microsoft and Amazon, with Google a distant third.”

In a transparent jab at Amazon, Microsoft lately signed a five-year cloud companies take care of Walmart (WMT). The settlement ought to assist each corporations tackle Amazon.

It is a massive market to dominate. World spending on public cloud companies and infrastructure is predicted to hit $160 billion this yr and attain $277 billion by 2021, in response to projections from IDC.

Microsoft’s traction on this market has catapulted its inventory to all-time highs this yr. Morgan Stanley analysts predicted in March that cloud computing might push Microsoft to a $1 trillion market cap, becoming a member of Apple (AAPL) and Amazon within the race to that astronomical determine.

Microsoft’s inventory ticked up four% in after hours buying and selling Thursday following the earnings report.

CNNMoney (New York) First printed July 19, 2018: 5:51 PM ET

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