Azure, Office 365 drive Microsoft revenues, while mobile lags

From InfoWorld: Microsoft had a lot to brag about when it announced its first-quarter 2015 financials yesterday. The company boasted of higher gross margins and revenue, big gains in hardware and cloud sales, and -- most important -- a success story in its ongoing reinvention as a cloud services outfit, in both its business and consumer operations.

Even the fall in profits incurred by restructuring expenses and the acquisition of Nokia didn't sink the boat. But it showed that Microsoft's struggle to come up with compelling mobile products for consumers and business may not be as easy as giving everyone Windows everywhere.

As far as the cloud goes, Microsoft showed its businesses are solid and growing even more so. Microsoft reported a 128 percent year-over-year growth for Azure and its other commercial cloud services, including Office 365 for business. Home users of Office 365 (now numbering 7 million, Microsoft says) also edged up 25 percent over the last quarter.

In some ways the Office 365 figures are more significant than the Azure numbers, since they hint that one of Microsoft's most intractable customer groups -- users of the desktop, on-premises Office suite -- can be transformed incrementally into cloud users, and from "transactional purchasing to annuity" (read subscription) customers. Microsoft has made wise moves in that area, such as offer more granular Office 365 subscription deals for small businesses. The basic Business SKU, which includes the full Office desktop apps, is now $8.25 per user per month for up to five devices per user.

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