Microsoft reported good news during earnings Thursday. The search business saw revenue, excluding traffic acquisition costs, rise 21%. Its latest operating system, Windows 10, created increased usage for the deeply embedded search engine Bing.
During the earnings call Microsoft CEO Satya Nadella told analysts that the clearest indicator of the company's progress is that nearly 30% of the search revenue in December came from Windows 10 devices, partly as a result of user engagement with Cortana.
Overall, Microsoft reported net income of $6.3 billion on non-GAAP fourth-quarter revenue of $25.7 billion. The numbers beat analysts' estimates.
Mobile phone revenue were down 4%, but sales of Surface Pro 4 and Surface Book pushed up revenue growth by 29% year-over-year -- about $1.3 billion in sales for the Pro and Book line. Office 365 saw 70% revenue growth and now has 20 million consumer subscribers.
The really good news came from cloud services Azure, which grew 140% with a commercial cloud run rate hitting $9.4 billion. It appears that Nadella's "cloud first" strategy continues to take the minds of C-suite executives by making Windows and Office a Software as a Service to match the prices of Amazon's cloud-based infrastructure.
Demand for cloud services continues to skyrocket. The Intelligent Cloud (IC) business, which includes service revenue and Enterprise Services, generated $6.4 billion, compared with $5.9 billion in the third quarter, more of what analysts want to see.
Cloud services are going so well for Microsoft that Business Insider suggests it is growing faster than Amazon's reported 127% in revenue gain.