Microsoft Azure public cloud revenue growth remains strong at 51% and locked into a less volatile pattern. 

Azure revenue grew 51% year over year during the company’s fourth quarter of fiscal year 2021, marking a continued period of stabilization in public cloud revenue growth for the world’s second-largest hyperscaler. Microsoft, which doesn’t disclose its public cloud revenue in dollars, reported a 50% jump in Azure revenue in the previous two quarters.

“Our commercial cloud surpassed $69 billion in annual revenue, up 34%. We’re seeing revenue growth across industries, customer segments, and geographies with over 50% of sales coming from outside the United States,” Microsoft CEO Satya Nadella said on the company’s earnings call.

Commercial cloud revenue increased 36% year over year to $19.5 billion in the quarter. Microsoft’s Intelligent Cloud segment, which includes Azure public cloud, Windows Server, GitHub, and enterprise services, grew 30% to $17.4 billion, including 34% year-over-year growth in server products and cloud services revenue. The entire unit’s rate of growth accelerated during the quarter, having previously flatlined at 23% during the previous two quarters. 

“We exceeded expectations across our consumption and per-user Azure business, as well as in our on-premises server products business. Overall, server products and cloud services revenue increased 34%,” CFO Amy Hood said, adding that consumption-based revenue is growing consistently and claiming a larger percentage of Azure revenue overall. 

Nadella noted that Microsoft opened data center regions in 15 countries during the last year, bolstering its ability to support more ubiquitous and decentralized computing for organizations that have multi-cloud, hybrid, and edge needs, in addition to regulatory and data residency requirements.

“And now we're taking cloud compute to the edge with 5G deployments. Our new Azure edge services help operators and enterprises deliver ultra-low latency compute fabric. And we're also helping operators run their networks in the cloud,” he said. “AT&T chose Azure to power its 5G core network, making it the first tier one operator to move its existing customer traffic to the public cloud.”

AT&T last month sold its Network Cloud technology to Microsoft and shifted gears to move its 5G network core, workloads, and services to Microsoft’s Azure for Operators platform. Nadella described AT&T’s plan as “a hybrid deployment in a completely new space where there is going to be compute that’s located to be able to take core network traffic and use cloud economics.”

Edge is also a growing area of focus for its ability to power old and new workloads with hybrid benefits, Nadella said. The financial performance of Microsoft’s edge business shows up in its overall server products and cloud services unit, depending on how organizations purchase edge services and the form those edge deployments take.

Microsoft is also benefiting from the increasingly complex cybersecurity landscape, according to Nadella. “It’s  never been clearer that every organization will need to deploy and maintain a zero-trust security architecture. This is driving accelerated demand for our integrated end-to-end solution spanning identity security compliance and device management across all clouds and all platforms,” he said.

“No other vendor is recognized by analysts as the leader in as many categories,” and that’s reflected by a 40% year-over-year growth in revenue, and market share gains, including nearly 600,000 security customers and a 70% increase in the number of small to midsized business customers, Nadella added. 

Microsoft banked $16.5 billion in net income on $46.2 billion in revenue, marking a 47% year-over-year increase in profit and a 21% revenue jump.