Microsoft, the second-largest public cloud provider, is riding high this week. The company reported better-than-expected results during the fourth quarter of its 2019 fiscal year, which came just one day after scoring a deal with AT&T that Microsoft CEO Satya Nadella described as “one of the largest cloud commitments to date” and the “largest commercial deal that we’ve signed.”

Revenue jumped 12% year-over-year to $33.72 billion, and net income increased 49% to $13.18 billion during the same period. “Microsoft is firing on all cylinders now, growing big in growing markets and even managing growth in mature markets like PCs," Patrick Moorhead, founder and principal analyst at Moor Insights & Strategy, wrote in response to questions. “In the cloud, Microsoft is cementing its spot as the No. 2 provider in [infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS)] services."

Microsoft banked $11 billion in commercial cloud revenue during the quarter, up 39% on an annualized basis. Azure revenue, which is included in that mix, grew 64% year over year, but the rate of growth continues to slide.

“While Azure’s growth rate is declining, Microsoft’s cloud franchises continue to grow at a very healthy clip,” Moorhead wrote. “As we have even seen from [Amazon Web Services], as the revenue base gets massive it's hard to keep the rate of increase going.”

During the earnings call, Nadella said Microsoft’s commercial cloud business is the largest in the world with more data center regions than its competitors. “Azure is the only cloud that extends to the edge spanning identity, management, security, and infrastructure,” he said, according to a Seeking Alpha transcript of the call.

Microsoft doesn’t disclose revenue for its Azure public cloud. The company’s intelligent cloud business, which includes the Azure public cloud and other products, closed the quarter with $11.39 billion in revenue, marking a 19% jump from the year-ago period. “In Azure, revenue growth will continue to reflect a balance of strong growth in our consumption-based business and moderating growth in our per-user business,” Microsoft CFO Amy Hood said during the call.

The company remains a clear but distant No. 2 in the public cloud space, but “it’s revenue growth rate is way above the overall market and growth rate, so it is gradually gaining market share,” wrote John Dinsdale, chief analyst and research director at Synergy Research Group. “In huge and strategically important markets that are growing rapidly, Microsoft is steadily gaining market share.”

Aggregate spending on cloud infrastructure services grew by 35% on an annualized basis, surpassing $45 billion during Q1, and Dinsdale expects a similar growth rate to be reflected in Q2 once all the cloud providers’ results are reported.