Microsoft officials, during the earnings report on October 26 said that its Office 365 commercial monthly active users number is now at 120 million, which is up from 100 million in April 2017. According to a report by Microsoft, the company is generating more revenue from Office 365 commercials than the actual selling of Office via non-subscription licensing. This report is as of this quarter, the company officials said.
The officials also said that the Microsoft expects to have 2/3rd of its Office business customers in the cloud by some time in its fiscal 2019 (which will be on July 1, 2018). It is believed that the Office 365 is offering the biggest contribution to Microsoft’s “Commericial Cloud through its collection of a number of its business cloud services, including Dynamics 365, Enterprise Security + Mobility, Azure and Power BI. Microsoft is not planning to break out any of these products lines separately. Microsoft has realized its $20 billion annual run rate for its commercial cloud, this quarter, which is a couple of months ahead of its original schedule that was established two years ago.
Microsoft is not planning to include LinkedIn (acquired by the company in 2016) as a part of Microsoft’s commercial cloud. However, the company’s officials mentioned repeatedly about the positive growth of LinkedIn and its contribution to the company’s overall earnings.
For its first fiscal quarter in 2018, LinkedIn have remained in profit than the recent quarters. On revenues of $1.1 billion for the quarter, the company executives said they are “ahead of plan” with LinkedIn and expecting huge growth and engagement for the platform. The company has observed some of its planned integration between LinkedIn and Microsoft services in 9 months since the acquisition closed. However, not all of the planned outlined in the previous year.
Almost all the Wall Street’s eyes are trained on Microsoft cloud, company’s “more personal computing” section is still adding a huge chunk of the company’s revenue. The officials at this tech giant said, this quarter is the last where Microsoft would be taken down by its slow shut down of its Windows phone business. They also said that they are expecting the Surface business to become strong, as it was this quarter. Surface revenues were up to $113 million compared to its previous ago quarter, making the business over $1 billion.
Microsoft has given credit of this growth to Surface laptop, as this is a brand new hardware category for the company and all sales are net-new. However, the company has not disclosed their net income from Surface laptops, so one cannot say if the business is profitable or not.
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