Nadella Explains: What Made Azure Soar in Microsoft Big Q4

 In today's Cloud Wars Minute, I unpack the strategy behind
Microsoft’s $368B in contracted cloud business and Q4 surge.


Highlights


00:39— CEO Satya Nadella explained what was
behind this huge growth in Microsoft's Azure revenue in Q4, which
ended June 30. Overall cloud revenue for the quarter was up 27%
to $46.7 billion. This is the first time it's ever released any
revenue figures for Azure.


01:14 — Azure was up — I think it was 34% — to
more than $75 billion. So, I divided four into 75, got almost $19
billion. It said it was “more than,” so I'm going to go with Q4
Azure revenue of $19 billion. And in Q4, it grew 39%. So 34%
Azure growth for the year, spiking in Q4 to 39%. And its RPO
(remaining performance obligation) was up an astonishing 37% to
$368 billion.


02:09 — Nadella pointed to, first, classic
migrations from on-prem to the cloud. He cited an enormous
initiative that Microsoft undertook with SAP to move Nestlé's
huge SAP estate from on-prem to the cloud. He talked about
cloud-native applications scaling very rapidly.


03:16 — And third, he talked about AI workloads:
the investments that Microsoft is making and the progress it is
making on building out its infrastructure for Azure to be able to
handle all of this new and rising demand. And he bristled a
little bit at the notion that some other hyperscalers are doing
more in the way of data centers and regions and gigawatt capacity
and data center capacity


04:22 — So again, an extraordinary quarter there
from Microsoft Azure, sort of at the heart of so much of this.
We'll have a lot more detail on this in an article that we'll be
posting later this morning on Cloud Wars.


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