Microsoft's third quarter was light relative to expectations, but the company said Azure delivered strong results and its commercial cloud business is on a 10 billion annual revenue run rate. The company reported earnings of 3.8 billion, or 47 cents a share, for the third quarter on sales of 20.5 billion. Non-GAAP earnings for the third quarter were 62 cents a share on revenue of 22.1 billion, down 6 percent from a year ago. Wall Street was looking for third quarter earnings of 64 cents a share on revenue of 22.09 billion. Microsoft said that a 4 cents a share one-time tax payment resulted in the earnings miss.
SAP's revenue from cloud subscriptions and support grew so quickly in 2016, the company has raised its forecasts for 2017 and 2020. Full-year cloud revenue grew 31 percent compared to a year earlier, accounting for over half of the company's revenue growth. Total revenue reached €22.1 billion (US$23.8 Profit after tax rose to €3.6 billion from €3.1 billion in 2015. SAP is keen to see more of its software business move to the cloud because, unlike traditional software licenses that bring a bump in revenue at the moment a deal is signed, it represents a predictable source of revenue.
In 2016, cloud computing started to dominate many IT market segments. As a business, Synergy Research Group reported that industry revenue for the four quarters ended Sept. 30 grew 25%. Operator and vendor revenue for six segments of cloud computing reached $148 billion during that period, with spending on private clouds accounting for over half the total but spending on the public cloud growing much more rapidly. As more and more companies are taking advantage of the benefits of moving to cloud services, there is a significant need for IT professionals to gain the skills needed to successfully use and implement a wide range of cloud services, making typical vendor-focused training solutions less valuable. This NCTA program was designed to provide IT professionals with a strong foundation in cloud technologies, and overall cloud architecture and management of cloud infrastructure, as well as a solid technical background in modern web services deployment and administration.
Microsoft CEO Satya Nadella has been instrumental in re-focusing the company on being a cloud-first business largely targeting enterprise customers. Microsoft shares surged 5% in early trading Friday,and passed a high set in 1999, helped by enthusiasm for progress in its cloud business. The stock was at up at 60.11,breezing past the 58.72 mark set in December 1999. Friday's rally follows Microsoft's latest quarterly report, out late Thursday, that beat analyst expectations for adjusted sales and profit and showcased a doubling of growth in its Azure cloud business, while reflecting continued strain from consumers' pivot away from PCs and traditional software purchases. "The biggest takeaway from this quarter's results will be the re-acceleration of Microsoft's cloud business, which now is on pace for more than 13 billion annualized revenue," says Josh Olson of Edward Jones Research.
The cloud computing race in 2020 will have a definite multi-cloud spin. Here's a look at how the cloud leaders stack up, the hybrid market, and the SaaS players that run your company as well as their latest strategic moves. Microsoft's first quarter sales fell short of expectations, but earnings were well ahead. Commercial cloud revenue was $15.2 billion, up 31% from a year ago. Commercial cloud revenue for Microsoft is now approaching a $61 billion annual revenue run rate.