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Microsoft cloud momentum grows as Nadella looks for more ISV involvement

Microsoft's Q4 numbers show a growth in cloud and a milestone is made with Office 365 revenues overtaking traditional licences

Microsoft's move to the cloud continued to gather momentum with the vendor's fourth quarter numbers including the revelation that Office 365 Commercial subscriptions had exceeded the revenue gained from traditional licences.

That milestone was part of a larger trend that saw the vendor deliver a 13% revenue increase to $23.2bn with Azure growth almost doubling.

The results for the three months ended 30 June will have missed the launch of Microsoft 365, which combines Office 365, Windows 10 and mobility and security into a single package, which is something that channel partners were urged to get behind at the vendor's recent Inspire event.

Microsoft's CEO Satya Nadella used that Inspire event to bang the drum for ISVs to work with the vendor and he returned to that theme in the analyst call after the Q4 results were announced.

"We also introduced ISV Cloud Embed to make it easier for partners to modernize their existing business applications and build new ones using Dynamics 365, Power BI, Power Apps and Microsoft Flow," said Nadella.

Nadella said that Azure revenue had grown by 97% year-on-year and it had taken steps to introduce support for GDPR to make sure customers were ready for next year's data compliance regulations.

He was asked about how the recently announced reorganisation would impact the firm and responded by mentioning it had to evolve to meet the demands of channel partners.

"Overall, the approach we have taken for multiple years now is to transform everything that we do inside the company, whether it’s the product creation, how we’re organized in the R&D, how we think about breaking down any silos and category definitions we may have had in the past, how we think about even marketing and the marketing approach, and then of course even with the go to market, and this transformation is ongoing," he said.

"This has been happening over multiple years, but we have now got very good customer momentum because ultimately this is all driven by the opportunity at hand, which is much bigger than anything that we have participated in the past, so the total addressable market is much bigger. And second, our customer expectations and our partner expectations of how we show up with them has changed," he added.

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