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Enterprise Cloud, Security Drive Microsoft’s Q2 Earnings

Microsoft Chief Executive Officer Satya Nadella emphasized the enterprise’s digital transformation as a key driver of the company’s growth, as the technology firm posted its Q2 FY2019 earnings on Wednesday evening (Jan. 30).

“Every company is becoming a digital company,” Nadella said during the company’s earnings call, during which executive vice president and chief financial officer Amy Hood outlined the organization’s performance.

Microsoft posted $32.5 billion in revenue, a 12 percent year-over-year increase, with $1.08 GAAP earnings per share.

Shares in the company dropped after the earnings data was released on news that revenue was slightly below analyst targets. The company’s cloud operations, driven by Microsoft Azure, were flat quarter over quarter with a 76 percent growth rate, also driving shares down by 3 percent, reports in CNBC said.

However, Microsoft remained upbeat on its performance, particularly in the enterprise cloud segment. The company posted $9.4 billion in revenues for its Intelligent Cloud operations, with Azure driving a 24 percent increase in server products and cloud services revenue.

During the firm’s earnings call, Nadella noted the importance of Azure’s ability to provide an integrated cloud solution for enterprise clients  pointing to key partnerships with Mastercard, UBS and BlackRock, which exemplify Azure’s role in supporting digitization in the financial services space.

Microsoft’s partnership with Mastercard was announced last month in an initiative to develop digital identity solutions, aimed at enhancing security in interactions between service providers and customers. Nadella also highlighted the company’s work in digital identity during the earnings call, noting that services like threat protection and compliance add to Microsoft’s position in the enterprise security landscape. The company’s “comprehensive approach to security and compliance” is driving the adoption of its enterprise technologies, he added.

“Our accelerating customer momentum is driven by our deep and growing partnerships with leading companies,” said Nadella during the call, “and differentiated innovation across our portfolio.”

Corporates are looking for partners in their digitization efforts, he noted.

“We’re seeing very large digital transformation efforts and projects we’re partnered with. They span all industries,” continued Nadella.


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