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Microsoft propels Dynamics and Azure growth in Q1 2018 earnings

The company reports revenue increase in cloud, Azure and Dynamics, with LinkedIn integration starting to show why Microsoft paid $23bn for the professional network

Microsoft has reported revenue of $24.5bn for the quarter that ended 30 September, bolstered by growth in its Office product suite, Azure and Dynamics 365.

The company said its Office 365 commercial products and cloud services revenue grew 42%, while Azure grew 90% and Dynamics 365 grew 65%.

Revenue in its productivity and business processes business grew 28% to $8.24 bn, its intelligent cloud business reported revenue of $6.92 bn, up by 13%, and its more personal computing business reported flat revenue of $9.3bn.

In a transcript of the earnings call posted on the Seeking Alpha financial blog, CEO Satya Nadella spoke about how the company was now moving Windows from a graphical user interface to mixed reality, with gesture and gaze control, along with voice.

Nadella said this type of user interface would change the way people and teams collaborate. “Our work with Ford is a great example of this promise. Ford’s designers are using Mixed Reality to blend 3D holograms digitally with models and physical production vehicles, allowing them to experiment and iterate on design much more quickly,” he added.

According to Nadella, the company has worked to “infuse artifical intelligence” (AI) into Office 365, and is developing a corporate AI-powered version of Cortana and Big.  

“Beyond new AI capabilities in PowerPoint, Word, OneNote and SharePoint, we’re enabling AI-first workloads like Bing and Cortana using the Microsoft Graph. Soon, you'll be able to search not only the public internet but also corporate intranet sites, line of business applications and people with Bing for Business, now in private preview,” he said.

“With Cortana, you’ll be able to query your calendar and automate tasks like scheduling a meeting or replying to an e-mail using just your voice.”

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The company made 29 references to LinkedIn during the earnings call. The professional social network, which Microsoft acquired for $26 bn in 2016, contributed 5% to the company’s revenue. Microsoft said it now has 530 million LinkedIn users.

“LinkedIn is on target to surpass 21 billion sessions this calendar year, and has seen its fourth consecutive quarter of 20%-plus sessions growth,” said Nadella.

“Engagement across the platform is strong, with 65% year-over-year growth in jobs, visitors across mobile and desktop, 60% growth in feed update views and nearly 40% growth in messages sent, driven by more ubiquitous messaging.”

He said Microsoft has integrated LinkedIn through its Relationship Sales product, which brings together LinkedIn Sales Navigator and Microsoft Dynamics. Nadella said the integration could transform business-to-business sales through social selling. 

Microsoft has also integrated Dynamics 365 for talent with LinkedIn Recruiter and Learning, to support human resources (HR) professionals in the talent marketplace, he added.

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