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Microsoft Surface Drags Down Revenue

Microsoft has reported a 6% percent rise in quarterly revenue to US$23.6 billion for the period ending March 31 this year, as the strong performance of cloud and Office products counteracted lackluster Surface sales.

Competition from other two-in-one and notebook manufacturers, as well as Microsoft’s failure to deliver major refreshes of the Surface Book or Surface Pro, saw Surface sales plummet 26% to US$831 million for the quarter.

The disappointing Surface sales contributed to a 7% decrease in revenue for the company’s personal computing division, with lower phone sales the primary factor according to Microsoft. Revenue from Windows OEM and gaming within the division saw growth of 5% and 4% respectively.

Microsoft primarily focused on strong results for its ‘Intelligent Cloud’ division (covering server products and cloud services) in its earnings press release, highlighting an 11% increase in revenue driven primarily by a 93% increase for its cloud computer platform Azure.

“Our results this quarter reflect the trust customers are placing in the Microsoft Cloud,” said Microsoft CEO Satya Nadella.

“From large multi-nationals to small and medium businesses to non-profits all over the world, organizations are using Microsoft’s cloud platforms to power their digital transformation.”

Net income for the quarter was up 28% to $4.8 billion.

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