Microsoft has released figures for its second quarter, ending December 31st 2014. Here is my simple summary of the figures showing the segment breakdown:
Quarter ending December 31st 2014 vs quarter ending December 31st 2013, $millions
|Devices and Consumer Licensing||4167||-1377||3876||-1105|
|Computing and Gaming Hardware||3997||-473||460||+49|
|Devices and Consumer Other||2436||+562||550||+163|
There are a couple of blotches of red in the figures, reflecting weak PC sales in the consumer market and decline in non-subscription Office products. This is offset by strong growth in cloud and subscription. Microsoft says in the accompanying press release that revenue from Office 365, Azure and Dynamics CRM online grew 114%. SQL Server and System Center grew revenue yet again, with server products up 9% overall. Microsoft also notes that this quarter revenue from Surface exceeded $1 billion for the first time, thanks to the success of Surface 3. Note though that margins are relatively poor on hardware.
Nadella talked up both cloud and integration in the earnings call. On cloud, he said that new Office 365 features like Sway, Delve and Video are “completely new scenarios”; I am personally not yet convinced by Sway but both Delve (a search service) and video look compelling. On integration he referenced unifying Xbox Live across PC, tablet, phones and Xbox, streaming Xbox games to Windows 10, and the unified app store and platform with Windows 10 phones, tablets and PCs.
A lot rests on Windows 10; following the rocky reception for Windows 8, Microsoft cannot afford to get this one wrong.