Microsoft FY 1Q15 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Cloud grew by 128%

“Our commercial cloud revenue grew a 128% year-over-year, the fifth consecutive quarter of triple-digit growth. In fact we’re the only company with cloud revenue at our scale that is growing at triple-digit rates. An 80% of the Fortune 500 are now on the Microsoft Cloud’

CIOs are selecting Office 365

“Office 365 had another terrific quarter and remains on path to becoming the unparalleled leader for cloud-based productivity apps. CIOs are selecting Office 365 as the center piece of their hybrid productivity solutions as they look to meet the growing mobile needs of their employees.’

Office 365, Dynamics CRM and Azure are driving cloud growth

“The cloud story I think is fairly clear at this point. The combination of Office 365, as well as Dynamics CRM in particular combined with Azure are driving our cloud growth.’

Cloud is driving server growth

“our servers have become much more competitive because of the same technology investments that we’re making in our cloud. And the used cases that we see in the cloud in many cases happen to be net new workloads, IOT was not driving our server growth traditionally, mobile backend was not driving our servers traditionally.”

Uses of Azure bring us into areas we haven’t participated in

“machine learning and advanced analytics of areas we did not participate even in the past. So, one of the things that we have seen is a lot of new used cases of Azure, which were really new Greenfield territory for us. And it turns out that the need for more computing, more storage and more infrastructure server products is much broader than just even the hyper scale public cloud because the one thing that is true is there are more devices in that unit backend.”

Think of Azure as the common fabric to deliver all of our applications

“it’s absolute perquisite for us to have entirety of our cloud infrastructure plant drive scale economics for us. And in fact, a lot of the core Azure technology around machine management and data center management comes out of our bing efforts. We manage all of the supply chain, all of it is as one supply chain; we do SKU design as one SKU design; we drive costs of both network storage, compute down altogether. In fact you should think of Azure as the common fabric of all our applications. And you look at even some of our games like Halo, a significant usage of our cloud. And that’s what’s really driving some of the economics. In fact the first — the fact that — I celebrate the fact that we don’t have just one first party workload because it’s very easy for one first party workload to completely opt if you will the architecture of a cloud. But in our case, we have a very diverse set of workload. We have Xbox LIVE; we have Office 365; we have Dynamics and Bing and that diversity is what allows us to build in fact for our own needs a cloud architecture that then can meet many more workloads and that’s working pretty well for us.”