Datacentre investments crucial for Microsoft’s AI leadership, says company

Microsoft reported a revenue of $61.9bn for the quarter ending on March 31st, 2024, showing a 17% increase compared to the same period last year.

The company’s cloud business experienced a 23% growth, contributing $35.1bn in revenue. Microsoft’s Intelligent Cloud business also grew by 21%, generating a revenue of $26.7bn. This segment includes server products and cloud services, which saw a 24% increase driven by a 31% growth in Azure and other cloud services revenue.

Revenue growth of 13% was achieved in Microsoft’s Office Commercial products and cloud services business, mainly due to a 15% growth in Office 365 Commercial revenue. LinkedIn revenue increased by 10%, while the Dynamics product range and cloud services family saw a growth of 19%, with the Dynamics 365 products growing by 23%.

In the More Personal Computing unit, which includes Windows, the reported revenue was $15.6bn, with an 11% increase in Windows OEM revenue and a 13% increase in Windows Commercial products and cloud services revenue.

CEO Satya Nadella commented on the company’s data center growth, stating that Microsoft wants to be a leader in the technology shift towards artificial intelligence (AI). He emphasized the need for allocating capital to train large foundation models in order to maintain their leadership position in this area.

Microsoft’s CFO, Amy Hood, discussed the impact of AI on the cloud plans of IT leaders. She mentioned that Microsoft is observing a return to growth in IT migration projects and an increase in AI projects, rather than a transition from core cloud consumption. She also highlighted the importance of customer service and marketing departments making IT investments, suggesting that IT spending is not limited to the traditional IT budget under a CIO.

Hood urged IT leaders deploying workloads in the cloud to optimize their usage for efficiency, as it is crucial for customers to maximize the value and growth potential of their operations.

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