Microsoft hits its $20 billion annual run rate goal for commercial cloud in strong Q1

Microsoft hits the mark on its commercial cloud goal set back in 2015.
Written by Larry Dignan, Contributor

Microsoft hit its $20 billion commercial cloud annual revenue run rate target and delivered better-than-expected first quarter results.

The commercial cloud target was set its $20 billion annual run rate goal in April 2015. For those keeping score at home, Microsoft's commercial cloud rollup includes Azure; Office 365 business services (Exchange Online, SharePoint Online, Skype for Business Online, Microsoft Teams); Dynamics 365; and its Enterprise Mobility + Security Suite (EMS).

Microsoft also started disclosing commercial cloud revenue by quarter.


Overall, Microsoft reported first quarter net income of $6.6 billion, or 84 cents a share, on revenue of $24.5 billion, up 12 percent from a year ago.

Wall Street was expecting Microsoft to report first quarter earnings of 72 cents a share on revenue of $23.56 billion.

Here's a look at what Microsoft products drove growth.


By the numbers:

  • Productivity and business processes revenue was $8.2 billion, up 28 percent. The results were driven by Office 365 commercial revenue as well as Dynamics 365.
  • LinkedIn revenue was $1.1 billion in the quarter.
  • Server products and cloud services revenue was up 17 percent in the first quarter.
  • Azure revenue growth was 90 percent in the third quarter.
  • Surface revenue was up 12 percent due to sales of the latest Surface Laptop.
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