Azure growth accelerates for first time in two years

Microsoft sales rise 14 per cent in Q2

Microsoft's Azure revenue growth accelerated for the first time in two years in Q2, the vendor has revealed.

Overall revenue for the quarter ending 31 December 2019 climbed 14 per cent year on year to $36.9bn (£28.2bn).

Sales in the Intelligent Cloud division rocketed 27 per cent, which Microsoft attributed to a return to accelerated growth for Azure for the first time since Q2 2018 (the quarter ending 31 December 2018).

The vendor said that Azure revenue grew 62 per cent year on year, compared with 59 per cent in the previous quarter.

Microsoft CFO Amy Hood said the return to accelerated growth was partly down to new workloads being spun up in Azure, rather than purely migration.

"We did have a very good and healthy, broad-based consumption growth, especially in IaaS and PaaS," she said.

"One of the important parts that we started to see this quarter was not only good workload migration work, strong growth and the optimisation of the workloads already running.

"Some of these new PaaS workloads, like Synapse and Cosmos DB and Arc, are really starting to add some momentum in that part of the stack as well, which is important.

"The SaaS component, or the per-user component, also tends to be where you'll get some variability. We had a good SaaS component quarter in addition to the healthy base, and that does result in some movement in that number from quarter to quarter."

Microsoft also reported sales growth in its other two units.

Productivity and Business Processes - which houses LinkedIn, Dynamics and commercial Office products - saw revenue grow 17 per cent year on year to $11.8bn.

More Personal Computing sales climbed two per cent to $13.2bn.

The computing division's growth was driven largely by the Windows 10 refresh, with Windows OEM revenue shooting up 18 per cent. But Surface revenue growth was weaker than expected, at six per cent.

Hood said that "continued strong momentum in the commercial segment (of Surface) was partially offset by execution challenges in the consumer segment."