Microsoft's cloud unit becomes its biggest for the first time

Vendor also reports record full-year revenue

Microsoft's cloud division has become its biggest by revenue for the first time.

The vendor published its Q4 numbers overnight, with sales for the period ending 30 June 2019 rising 12 per cent year on year to $33.7bn.

Microsoft splits its business into three units: Productivity and Business Processes; Intelligent Cloud; and More Personal Computing.

The Intelligent Cloud division, which encompasses Azure and other products including SQL Server and Windows Server, saw sales rise 19 per cent to $11.4bn.

The business processes unit saw income rise 14 per cent to $11bn, while computing climbed four per cent to $11.3bn.

This marks the first time that Microsoft's cloud division has been its largest, since it implemented the three-division reporting structure three years ago.

Microsoft CEO Satya Nadella said: "It was a record fiscal year for Microsoft, a result of our deep partnerships with leading companies in every industry.

"Every day we work alongside our customers to help them build their own digital capability - innovating with them, creating new businesses with them, and earning their trust.

"This commitment to our customers' success is resulting in larger, multi-year commercial cloud agreements and growing momentum across every layer of our technology stack."

Microsoft still does not reveal exact revenue figures for Azure, but said that year-on-year sales growth was 64 per cent. Enterprise services, which is in the same business unit as Azure, grew four per cent.

Angela Eager, research director at TechMarketView, praised Microsoft for the way it is linking its products together.

"It's been a good while since Microsoft was reliant on a single product for the bulk of its revenues but what we're seeing now is more than a multi-product/multi-service company; it is a company where each offering reinforces adoption across the rest of the portfolio," she said.

"A review of the most recent year against the prior year, shows the effect building. One of the results is larger, multi-year deals, which Microsoft highlighted as one of the growth drivers for Q4/FY19.

"The latest being the $2bn deal with AT&T that includes wide-scale deployment of Office 365 and moving workloads to Azure. The contract is positioned to feed cloud revenue over several years."

Microsoft is currently the only company in the world valued at $1tn, and it's share price rose by over two per cent in after-hours trading.