Microsoft and Google see quarterly cloud revenues surge

Microsoft's Azure sales grew 50 per cent in the quarter while Google Cloud revenue surged 45 percent

A surge in cloud sales at two of the world's biggest public cloud vendors, Microsoft and Google, drove significant overall quarterly revenue increases as businesses continue to shift their workloads away from on-premise servers.

Microsoft reported overall sales of $45.3bn for its Q1 2022, an increase of 22 per cent from the year before, with CEO Satya Nadella claiming that quarterly cloud revenue across the whole company had surpassed $20bn for the first time.

Revenue in its entire Intelligent Cloud division, which includes Azure public cloud, rose 31 per cent to $17bn. Azure and other cloud services revenue grew 50 per cent in the quarter, Microsoft said.

The company also saw strong revenue gains of 22 per cent in its Productivity and Business Processes Division - which consists of Office, LinkedIn and Dynamics - and 12 per cent for its More Personal Computing segment - which includes Windows OEM and commercial product sales.

"We are building Azure as the world's computer, with more datacentre regions than any other provider delivering fast access to cloud services while addressing critical data residency requirements," Nadella said on the company's earnings call.

Microsoft reported operating income of $20.2bn and non-GAAP net income of $17.2bn, up 27 per cent and 24 per cent respectively, while non-GAAP diluted earnings per share was up 25 per cent to $2.27.

Amy Hood, Microsoft's chief financial officer, said the business is expecting "healthy drive-based growth" in its Azure consumption business "consistent with recent trends" in its next quarter and claimed that revenue "will continue to be driven by Azure".

Meanwhile, Google Cloud revenue surged 45 percent to $4.9bn in its third quarter compared with the same period last year. However, the business still made an operating loss of $644m, which it has cut from $1.21 billion in the third quarter of 2020.

Google Cloud's sales helped parent company Alphabet post a 41 per cent increase in overall revenue to reach $65.1bn.