Microsoft continues to see strong growth in its Intelligent Cloud Division, which is home to the Microsoft Azure public cloud platform. The company, which reported its fiscal year 2017 third quarter earnings yesterday, said the Intelligent Cloud Division’s revenue grew 11 percent to $6.8 billion.
Microsoft also reported that the company’s Commercial Cloud business has an annualized run rate of $15.2 billion. However, that figure includes Office 365.
Microsoft doesn’t break out Azure revenue alone, but it did say that in the fiscal third quarter sales increased 93 percent.
While these numbers are strong, they aren’t particularly unusual for Microsoft Azure. In the first quarter of fiscal 2017, the company reported Azure revenues were up 116 percent and in the second quarter of fiscal 2017, the company said sales were also up 93 percent.
Interestingly, Microsoft CEO Satya Nadella said on the earnings call with investors that while everyone is talking about the cloud, Microsoft believes the edge is the most interesting part of the cloud because that is likely where the next phase of growth will occur. “Whether it’s IoT, whether it’s the auto industry, whether it’s what’s happening in retail, essentially compute is going where the data gets generated, and increasingly data is getting generated at the volumes in which it’s drawing compute to it, which is the edge,” he said, according to a Seeking Alpha transcript of Microsoft’s earnings call.
Nadella touted the company’s recent work in the Internet of Things (IoT), and specifically what Microsoft is doing at the IoT edge. “The edge compute, the ability to run a neural network at the edge, do inferences at the edge, is exciting,” he said.
Earlier this week the company debuted Microsoft IoT Central, a managed software-as-a-service (SaaS) platform. IoT Central is built on the Azure cloud and will use Microsoft’s existing Azure IoT suite to make it easier for companies to deploy IoT.
Microsoft reported non-GAAP revenue of $23.6 billion with an operating income of $7.1 billion non-GAAP. Net income was $5.7 billion, and earnings per share were $0.73 non-GAAP.