Microsoft on course for $20bn commercial cloud business by 2018 - Satya Nadella

CEO also pours cold water on Surface phone rumours, saying the vendor is focused on providing software to 'other platforms'

Microsoft is on track to having a $20bn commercial cloud business by 2018, according to CEO Satya Nadella.

Speaking at Microsoft's annual shareholders meeting, Nadella pointed out highlights of Microsoft's 2016 - including the launch of well-received Surface devices - and said that the Azure platform has "grown triple digits" for the last seven consecutive quarters.

Microsoft's commercial cloud business currently has an annual revenue run-rate of $13bn, he added.

"More than 60 per cent of the Fortune 500 now have at least three of our cloud offerings," he said.

"If you look at it, we are not building one cloud service. We are building a complete digital transformation cloud platform for our customers which has infrastructure elements, which has the application or SaaS services elements, as well as client devices.

"But at the core of our cloud momentum is growth in Azure as the true hybrid cloud platform because we don't think of our services as legacy, in fact we think of them as the edge of our cloud, whether it's Windows Server or to our SQL Server.

Mobile fears

Nadella moved to address the fears of one Microsoft shareholder who was concerned that Microsoft will abandon Windows Phone users. Earlier this year Microsoft ditched its $7bn Nokia smartphone hardware business and has not yet indicated a return to the market, despite persistent rumours of a Surface phone.

"The HP X3 [Windows smartphone], which came out recently, is perhaps a great example of a differentiated device built using the Windows phone platform and that sort of points for the direction," Nadella said.

"We will keep looking at different forms, different functions that we can bring to mobile devices, while also supporting our software across a variety of devices.

"So, that's the approach you will see us take. We are not stepping away from supporting our Windows phone users, but at the same time, we are recognising that there are other platforms in mobile that have higher share and we want to make sure that our software is available on that."