Microsoft: Cloud and Windows OEM sales up, but Surface? No, not even during WFH boom

Water's wet, sky's blue, and Redmond's revenues grew in Q1 2022

Even a "stronger than expected" PC market with unprecedented demand from homebound workers couldn't lift Surface revenues in Microsoft's first quarter for fiscal 2022 - in an otherwise stellar quarter for the firm.

Windows OEM revenue increased by 10 per cent – driven, as CFO Amy Hood said in an analysts' call, "by a stronger than expected PC market."

However, Surface revenue dropped by 19 per cent in constant currency (although Hood pointed to a strong prior year) for the quarter, which ended September 30, 2021. Supply constraints will certainly have played a part in this, as well as a line-up due for a refresh. The recent product launch will make next quarter's results interesting reading. Hood reckoned the decline would likely run on, but only in single digits "as we continue to work through supply chain uncertainty, particularly in our premium devices."

Microsoft otherwise reported another set of impressive results last night, notching up a 22 per cent increase in revenues to $45.3bn for Q1 of its fiscal 2023, ended 30 September.

That $45.3bn figure was made up of $15bn for Productivity and Business Processes (up from $12.3bn the previous year), $17bn for the Intelligent Cloud 9 (up from $13bn), and $13.3bn for Personal Computing (up from $11.8bn).

Hood also gave some figures for the Microsoft 365 subscriber count, which had grown by 50 per cent and stood at 54.1 million this quarter. The number of paid Office 365 commercial seats also jumped by 17 per cent year-on-year while Power Apps saw 197 per cent growth in constant currency.

Windows revenues were up, however, CEO Satya Nadella made the bizarre claim that "Windows 11 is also the most open platform." Open, it seems, to all except those who dare to run hardware not on its limited compatibility list. On that topic, Hood had some news for customers expecting that kit bought in the last few months would be OK.

It appears not: "With nearly all devices built this quarter eligible for upgrade" (our emphasis). According to Hood, it seems there could be a good few customers left out in the cold.

Still, Microsoft comfortably blew past its estimates and those of analysts. While it did not break down the dollar value of its sales, a growth of 48 per cent growth (in constant currency) in Azure and "other cloud services" is not to be sniffed at. The markets agreed; at time of writing the company's shares were up by just under $2 and headed towards a record high. ®

Similar topics

Other stories you might like

  • Prisons transcribe private phone calls with inmates using speech-to-text AI

    Plus: A drug designed by machine learning algorithms to treat liver disease reaches human clinical trials and more

    In brief Prisons around the US are installing AI speech-to-text models to automatically transcribe conversations with inmates during their phone calls.

    A series of contracts and emails from eight different states revealed how Verus, an AI application developed by LEO Technologies and based on a speech-to-text system offered by Amazon, was used to eavesdrop on prisoners’ phone calls.

    In a sales pitch, LEO’s CEO James Sexton told officials working for a jail in Cook County, Illinois, that one of its customers in Calhoun County, Alabama, uses the software to protect prisons from getting sued, according to an investigation by the Thomson Reuters Foundation.

    Continue reading
  • Battlefield 2042: Please don't be the death knell of the franchise, please don't be the death knell of the franchise

    Another terrible launch, but DICE is already working on improvements

    The RPG Greetings, traveller, and welcome back to The Register Plays Games, our monthly gaming column. Since the last edition on New World, we hit level cap and the "endgame". Around this time, item duping exploits became rife and every attempt Amazon Games made to fix it just broke something else. The post-level 60 "watermark" system for gear drops is also infuriating and tedious, but not something we were able to address in the column. So bear these things in mind if you were ever tempted. On that note, it's time to look at another newly released shit show – Battlefield 2042.

    I wanted to love Battlefield 2042, I really did. After the bum note of the first-person shooter (FPS) franchise's return to Second World War theatres with Battlefield V (2018), I stupidly assumed the next entry from EA-owned Swedish developer DICE would be a return to form. I was wrong.

    The multiplayer military FPS market is dominated by two forces: Activision's Call of Duty (COD) series and EA's Battlefield. Fans of each franchise are loyal to the point of zealotry with little crossover between player bases. Here's where I stand: COD jumped the shark with Modern Warfare 2 in 2009. It's flip-flopped from WW2 to present-day combat and back again, tried sci-fi, and even the Battle Royale trend with the free-to-play Call of Duty: Warzone (2020), which has been thoroughly ruined by hackers and developer inaction.

    Continue reading
  • American diplomats' iPhones reportedly compromised by NSO Group intrusion software

    Reuters claims nine State Department employees outside the US had their devices hacked

    The Apple iPhones of at least nine US State Department officials were compromised by an unidentified entity using NSO Group's Pegasus spyware, according to a report published Friday by Reuters.

    NSO Group in an email to The Register said it has blocked an unnamed customers' access to its system upon receiving an inquiry about the incident but has yet to confirm whether its software was involved.

    "Once the inquiry was received, and before any investigation under our compliance policy, we have decided to immediately terminate relevant customers’ access to the system, due to the severity of the allegations," an NSO spokesperson told The Register in an email. "To this point, we haven’t received any information nor the phone numbers, nor any indication that NSO’s tools were used in this case."

    Continue reading

Biting the hand that feeds IT © 1998–2021