Cloud Makes Up for Weak PC Market for Microsoft
Microsoft posted higher revenue in the quarter, helped by the rapid growth of its cloud division. This compensated for the decreased demand for licenses for the Windows operating system.
Electronics makers are selling fewer PCs now that inflation is so high that consumers are spending less, and Microsoft has been aware of that. With the decline in new PCs, the company is also selling fewer licenses for its operating system. As a result, PC manufacturers paid 15 percent less to use Windows for their devices.
Still, total revenue in the first quarter of the broken fiscal year was $50.1 billion, up 11 percent from the same period last year. Moreover, Microsoft achieved more than half of that turnover with its cloud software, which yielded almost a quarter more than a year earlier. As a result, operating profit, i.e. before interest and tax payments, rose 6 percent to $21.5 billion.
In addition to cloud software, Office packages also sold well with business and private customers. In addition, the social media platform LinkedIn also grew. However, the company earned less on selling Xbox game consoles and games. Like other American multinationals, Microsoft is suffering from a strong dollar.
Although sales continued to rise, it was the lowest growth rate in the past five years. CEO Satya Nadella stated “disciplined” to deal with the costs. Microsoft recently confirmed that it plans to cut nearly 1,000 jobs. However, that intervention would affect less than 1 percent of the total workforce of 221,000 people.