Azure: 50% of Microsoft Cloud’s $110B Revenue, CEO Nadella Reveals

Devesh Beri

During the latest quarterly earnings results declaration, Microsoft’s CEO, Satya Nadella, revealed a significant milestone for Azure. For the first time, Azure contributed 50% to the total annual revenue of Microsoft Cloud, which amounted to $110 billion in constant currency, TechCircle reported.

Nadella highlighted Azure’s continuous growth as customers migrate their existing workloads to the platform and invest in new ones. This trend indicates a strong and ongoing shift towards cloud adoption, presenting a promising long-term cloud opportunity.

In the quarter ending June 30, Microsoft reported overall revenue of $56.2 billion, an 8% increase from the previous fiscal year. The major driver behind this growth was the revenue generated by Microsoft Cloud, which reached $30.3 billion, marking a substantial 21% year-on-year growth. Additionally, the revenue from Microsoft Intelligent Cloud, primarily powered by Azure cloud computing, rose by 15% to reach $24 billion during the same quarter.

Nadella also emphasized Microsoft’s commitment to leading the new AI platform shift. Customers are leveraging the next generation of artificial intelligence (AI) to tackle various challenges and opportunities, using Microsoft Cloud to optimize their digital investments and improve operational efficiency.

The Azure OpenAI Service has gained significant traction, adopted by over 11,000 organizations across different industries, including prominent names like Volvo Group, IKEA, and Flipkart. On average, the service has been attracting 100 new customers every day this quarter, demonstrating its appeal and value to businesses. Genpact recently joined forces with Microsoft to utilize the large language model APIs available through Azure OpenAI Service. At the same time, Meta (formerly known as Facebook) announced the availability of its latest language model, Llama, through Microsoft Azure.

Furthermore, Microsoft highlighted the success of its AI-powered tools for developers, specifically GitHub Copilot and VS Code. GitHub Copilot, an AI pair programmer, has emerged as a category-leading product with strong organic interest, evident from the growing number of self-service sign-ups. More than 27,000 organizations are now using GitHub Copilot for Business, representing a two-fold increase in usage quarter on quarter. These achievements demonstrate Microsoft’s commitment to pushing the boundaries of AI technology and providing developers with powerful tools to enhance their productivity.