Microsoft’s cloud computing business is failing to live up to expectations with executives blaming unexpectedly high taxes for the slower than expected growth.
For Q3 end March 31 Microsoft reported net income of US$3.76 billion down from $4.99 billion a year ago while revenue fell to $20.53 billion, from $21.73 billion.
Revenue from licensing Windows to PC makers did better over all, but it still fell two percent, excluding the impact of foreign currency fluctuations.
This is despite a downturn in PC sales as global shipments fell 9.6 percent overall according to research firm Gartner.
Microsoft’s intelligent cloud business, which includes Azure was a bright spot with revenue increasing eight percent to $6.1 billion.
Smartphone revenue fell 46 percent but income from Surface, the company’s family of mobile computers, increased 61 percent.
