Microsoft 1Q15 Earnings Call Notes

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9% constant currency growth

“This quarter, we delivered $21.7 billion in revenue, an increase of 6% year-over-year or 9% in constant currency. We are seeing the impact of foreign exchange, geopolitical trends in certain geographies and product transitions. We’re taking steps to respond quickly and adjust our plans as needed while we continue to move forward in our transformation.”

Customers moving to the cloud

” Increasingly, customers are choosing Microsoft cloud services to transform their own businesses, going beyond just moving existing workloads to the cloud. These results showcase our ability to transform and perform simultaneously.”

Triple digit growth in commercial cloud

“Our commercial cloud annualized run rate now stands at $6.3 billion, marking the seventh consecutive quarter of triple-digit revenue growth.”

Office is the driver

“Office 365 is clearly a key growth driver. Like any cloud service, we track how people are actually using it and we are proud that Office 365 is a vibrant, active service. Right now, there are nearly 50 million Office 365 monthly active users inside businesses.”

Azure also seeing momentum

” Azure is also seeing impressive usage momentum. Right now, more than five million organizations are represented in Azure Active Directory with more than 425 million identities. Storage is also a strong indicator of consumption, and now, we have 50 trillion objects stored in Azure, a 3x growth year-over-year in storage transactions, more than five trillion in March alone. And Azure websites are growing with nearly half a million sites hosted.”

Azure compute instances with more memory and storage than any other public cloud provider

“We also delivered new Azure compute instances this quarter with more memory and storage than any other public cloud provider, attracting more mission-critical workloads to the cloud.”

More annuity relationships

“Overall I would say there’s a secular movement that’s happening in particular with Office 365, quite frankly, it’s happening across the entire product portfolio of Microsoft which is more to what I would described as annuity relationship as well as subscription relationships.”

The way that Windows is delivered is changing

“there is actually a much more fundamental transformation happening even with how we think about Windows and its delivery ”

“if you think about when we say Windows-as-a-service it’s actually a pretty profound construct which involves us being able to not only think about what ships with OEMs, but how do we on a continuous basis, if it’s a consumer we have things now in the store, we have subscriptions, we have gaming and then when it comes to the enterprise there’s management, security, servicing which is all unique value. So there is going to be an increasing emphasis in the concept of lifetime value that we can deliver to customers.”

It’s not just a one for one shift to the cloud from existing customers

“there’s significant traction we have in terms of moving beyond just one-for-one shift of a workload that traditionally ran on our server to our Azure Cloud. In fact if anything the majority of what we are seeing is new. Even in Office 365 it’s not just one-for-one shift. Of course if you are – were using as a large enterprise Exchange and you moved to Office 365 you moved to using Exchange Online; same thing is true for SharePoint. But again take all the other things I described, power BI , Dell and the list goes on, take eDiscovery; even for the largest of enterprise these were things that had low penetration or low deployment. And so we are seeing increasing usage of that.”

I’ll take a SQL application and bring it to the cloud

” A very classic scenario would be I’ll take a SQL database application, bring it to the Cloud and then build a new mobile back end using the same data. So reuse of code, reuse of data, so you would use some amount if iOS infrastructure and then past consumption. So that’s one of the very typical enterprise solutions you will see.”