Microsoft’s revenue surpasses expectations

For some workers, a return to the office has already begun and it seems that hybrid working is becoming a norm for many. This shift in working location creates many questions about how HR providers can adapt their products and remain profitable in an ever-changing working environment.

While few would be surprised to see Microsoft navigate the changing tides of the pandemic effectively, some may be shocked by just how successful the company has been.

In its fiscal year 2022, quarter three earnings release, Microsoft revealed that the company’s revenue reached $49.4 billion; an increase of 18% year-on-year. Interestingly, the profits didn’t come from the headline-making acquisition of gaming behemoth Activision Blizzard.

Instead, Microsoft made significant gains through its business offerings.

Microsoft’s growing revenue

Despite workers returning to physical spaces, Microsoft’s Office and cloud business have managed to become increasingly profitable. Both Office and cloud business come under the umbrella of ‘revenue in productivity and business processes’ and the services reached a revenue of $15.8 billion. This represents 17% growth over the last year.

Drilling down into the specific tools and services that made this possible, Microsoft saw its commercial Office products increase revenue by 12%. This was bolstered by a 17% growth in revenue for Office 365.

Additionally, Microsoft-owned LinkedIn saw its revenue climb 34% in a year. This is undoubtedly reflective of increased digital communication for professionals and the social platform’s success with LinkedIn Learning.

Learning and development (L&D) have become a priority for many leaders over the course of the pandemic and ‘Great Resignation‘.

The importance of cloud services

Over the course of the last two years, many businesses will have discussed cloud services. The reasoning behind a shift to the cloud is clear; it’s cheaper because you don’t have to house data within the organization, it allows flexible access to programs in uncertain times, and it enables teams to share projects and collaborate easily.

With these benefits in mind, Microsoft has been able to capitalize on the growing cloud market. In a press release, the company noted: “Office consumer products and cloud services revenue increased 11% and Microsoft 365 consumer subscribers grew to 58.4 million.”

Additionally, Dynamics products and cloud services revenue increased 22% year-on-year, and revenue in Intelligent Cloud reached $19.1 billion. This is an increase of 26% in the intelligent cloud sector.

Finally, Microsoft’s server products and cloud service grew by 29% year-on-year.

The tech giant has clearly managed to address an appetite for technology that enables flexible working and remote collaboration.

With these figures in mind, Satya Nadella, chairman and chief executive officer of Microsoft, said: “Going forward, digital technology will be the key input that powers the world’s economic output.

“Across the tech stack, we are expanding our opportunity and taking share as we help customers differentiate, build resilience, and do more with less.”