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Microsoft cloud business gathers steam as pandemic boosts growth

Microsoft Corp’s cloud computing business slightly re-accelerated and its Teams messaging and collaboration software won new users, as a pandemic-driven shift to working from home and online learning drove quarterly results ahead of investor targets.

COVID-19 has speeded up a move toward cloud-based computing, helping companies such as Microsoft, Amazon.com Inc’s cloud unit and Alphabet Inc’s Google Cloud. For Microsoft, it has also boosted demand for its Windows operating systems for laptops and its Xbox gaming services as families work, learn and play from home, leading to profit that was about 30% above expectations.

Daily users of its Teams messaging and collaboration software have risen to 115 million from 75 million in April, the company said.

“It was another healthy quarter, with continued demand for remote offerings continuing to power results,” Microsoft Chief Financial Officer Amy Hood told Reuters in an interview.

Revenue growth for Azure, the company’s flagship cloud computing business, was 48%, up 1 percentage point from the previous quarter and ahead of Wall Street estimates of 43.45%, according to consensus data from Visible Alpha. Hood said the rise in the fiscal first quarter ending in September was driven by “an increase in larger, long-term Azure contracts.” Reuters

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