Microsoft’s cloud business is keeping investors happy with strong revenue growth.
The company reported its earnings today (April 24), including $9.7 billion in revenue for its “Intelligent Cloud” business line, which includes sales of enterprise database software and use of Microsoft’s global network of data centers. It has generated $35 billion over the last four quarters, and Microsoft’s cloud revenue for this quarter is up 22% over the same period last year. Cloud services accounts for more than 30% of the company’s revenue.
The company’s stock jumped about 3% to $129 a share in after-hours trading.
CEO Satya Nadella reorganized the company around the cloud and artificial intelligence last year, making cloud growth the most important metric for Microsoft, which is competing with Amazon to grab large swaths of the lucrative cloud business. Analysts estimate the cloud market to grow to a $331 billion by 2022. It’s tough to directly compare the two companies’ cloud offerings, but if you include all of Microsoft’s cloud subscriptions like Microsoft Office and Dynamics 365, then its cloud revenue is actually larger than Amazon’s.
Azure, Microsoft’s cloud services arm, has seen its year-over-year growth rate wane from 98% to 73% over the last four quarters. But Mike Spencer, who manages investor relations for Microsoft, tells Quartz that demand for the cloud services is still strong.
“As [Azure] gets bigger, you’re just seeing a natural trend line from the law of large numbers, so there’s nothing out of the ordinary there,” Spencer said. “I would say from a demand standpoint, we’ve been pleased with what we’re seeing—from a competitive standpoint we’re in every deal, and we’re in every dialogue.”