Microsoft FY 1Q17 Earnings Call Notes

Microsoft’s (MSFT) CEO Satya Nadella on Q1 2017 Results

85m monthly active users of office 365M

“Monthly active users of Office 365 commercial are now over 85 million, up more than 40% year-over-year. Office 365 commercial seats were also up 40% year-over-year and revenue up 54% in constant currency. Across industries, customers such as eBay, European airline, jet, global pharmaceutical company, Allergan, the Fortune 100 companies like the energy leader Exelon and Liberty Mutual Insurance are choosing Office 365 to help make their employees more productive and secure.”

Vision for distributed computing

“Overall, again I go back to how we think about Azure. We really have a view of distributed computing which is more expansive doing just even our HyperScale cloud. We think about Azure and our servers as one distributed computing fabric that’s building. We also don’t think of Office 365 and Dynamics 365 as independent, we think of them altogether building out our commercial cloud because it takes one of the bigger growth areas we have in Azure, it’s IoT but it’s not just people connecting sensors and collecting data. They collect the data, they store the data, the analyze and do predictions on it but then after you do predictions you got to do something about the predictions. So in many cases they choose to use especially with the new Dynamics 365 field service module automating field service.”

Most excited about companies developing new workloads with cloud capabilities

“We definitely are seeing production workloads that are moving over from on premise, but I think the more interesting thing Heather for us is to see new workloads. When I look at what’s happening with say some of the most innovative work we’ve done around distributed computing which is service fabric and how people are in fact going straight to building out using our past services some of the new HyperScale cloud services using microservices and not only are they doing that but we’re also seeing great growth in our serverless infrastructure which is Azure functions. So I am actually as excited about new cloud growth from new cloud workloads from the same customers so the much interesting thing that I am observing is that it could be the same model customer that was participating with us in the client server area. We are not just building or moving their IT but they are building new digital services for HyperScale and that’s what it is probably unique in terms of what is changed year-over-year for us. It’s not just the Silicon Valley startups anymore, it is the core enterprise that is also becoming a digital company and we are well positioned to serve them and that’s good to see.”