Microsoft and Google report big jumps in cloud business

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Microsoft has posted another barnstorming quarter fuelled by its cloud business, with total group revenue up 19% to $41.7 billion.

For the third quarter, operating income was $17 billion, an increase of 31%, and net income was $15.5 billion - a jump of 44%.

Over at Google parent Alphabet, total first quarter sales were up 34% annually to $55.3 billion. Operating income more than doubled to $16.4 billion and net income sky-rocketed from $6.8 billion to $17.9 billion.

So what about the cloud when it came to the two companies' fortunes?

Satya Nadella, chief executive officer of Microsoft, said: “Over a year into the pandemic digital adoption curves aren’t slowing down, they’re accelerating, and it’s just the beginning.

“We are building the cloud for the next decade, expanding our addressable market and innovating across every layer of the tech stack to help our customers be resilient and transform,” he said.

Amy Hood, executive vice president and chief financial officer of Microsoft, added: “The Microsoft cloud, with its end-to-end solutions, continues to provide compelling value to our customers - generating $17.7bn in commercial cloud revenue - up 33% year-over-year.”

In the Intelligent Cloud segment of Microsoft's business - including Azure - sales were $15.1 billion and increased 23%. As part of this, server products and cloud services revenue increased 26% fuelled by Azure revenue growth of 50%.

Other elements of Microsoft's cloud business come through SaaS versions of its Office productivity, ERP, CRM and other software.

At Google, Ruth Porat, CFO of Google and Alphabet, said: “Total revenues of $55.3 billion in the first quarter reflect elevated consumer activity online and broad based growth in advertiser revenue.

“We’re very pleased with the ongoing momentum in Google Cloud, with revenues of $4 billion in the quarter reflecting strength and opportunity in both GCP (Google Cloud Platform) and Workspace.”

The Google Cloud business is also losing less money, even though the company has ramped up investments in enlarging data centres and building new ones to try and catch up with the larger cloud services businesses built by Amazon Web Services and Microsoft.

On that $4 billion in reported sales - which increased from $2.8 billion last year - the company still made an operating loss of $974 million. But the loss for the same quarter last year was $1.7 billion.