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Microsoft Corporation (NASDAQ:MSFT) Announce Major Azure Commitments That Demonstrating Their Maturity In The Cloud Business

Microsoft Corporation (NASDAQ:MSFT) shares are having volatile trading sessions in hte past couple of weeks, the stock gained 2.88% in the last trading session and closed at $105.74. Here is a recent announcement from the company.

Although Microsoft Corporation (NASDAQ:MSFT) is not a major cloud provider, they recently picked with their commercial bookings growing by 18%. In a conference call on Wednesday the CEO, Amy Hood, told analysts that the company is on track of major deals on their Microsoft Azure.

The growth in bookings has been a result of the robust renewal executions as well as the growing number of large long term azure contracts they are getting. For instance in November last year, the company announced a five-year contract with Gap Inc. (NYSE:GPS).

Microsoft growing in the cloud business

The move shows that Microsoft is continually growing and they are becoming an established operator in the cloud business as they seek to compete and get at per with Amazon Web Services who currently lead the market. For the first time, last year Amazon (NASDAQ:AMZN) provided an update on revenue that previously had not been recognized through over one year long contracts largely from Amazon Web services. By the end of the third quarter of 2018 Amazon had unrecognized revenue estimated to be around $17.8 billion.

Long terms contracts picked since July 2018

The latest indication on Microsoft picking is not the first time the CEO has talked about it because in an earnings conference call in July last year she gave an update on the broader and long term contracts. However, she did not bring up the issue in the October earnings call till Wednesday when she gave insight on the same. Commercial bookings have been remarkably resilient growing continuously as a result of steady renewal execution as well as an upturn in the number of long-term Azure deals.

The company’s commercial bookings growth for Q2 fiscal increased exceeding the 7% recorded the previous year and the 15% growth for Q1 fiscal. The remarks of Hood came just a day before the scheduled Amazon discussion the AWS results.

According to Brent Bracelin, the KeyBanc Capital Markets Managing Director, Microsoft’s Azure revenue for their last four quarters is estimated to be over $9.5 billion while AWS’ revenue for the Q3 exceeds $6.5 billion.

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