Microsoft Witnesses Decline In Computer Service Earnings Despite Cloud Driving In More Revenue

A new report released by Microsoft on Tuesday showcased a mixed bag of statistics regarding the company’s performance in its December quarter of 2022.

The software giant reported a revenue decline from its computer services that included the likes of Xbox content, original equipment, and even online services. During this period, the figure highlighted in terms of share sales stood at $52 billion as per records for the quarter in December.

This is the first fall in earnings for the tech firm in nearly five years as per the quarter seen since the year 2017. But it’s interesting to note how during this exact same period, we saw growth increase for several other computing services.

The revenue during this period stood at $27 billion which is nearly 22% up from the YoY turnover. It’s quite clear that such commercial offerings are driving in more value.

Out of the company’s three main business components, its Cloud is hailed for offering the best performance out there. Revenue rose by 18% and reached a figure of $21.5 billion. This particular uni entails a server’s products and even the likes of its Azure cloud offering.

This next huge wave related to computing is arising as the company continues to alter the world’s latest AI models into a sector of new computing offerings. As mentioned by the firm’s CEO, it claims to be committed to assisting clients to use the platform and make use of tools that have more to do with providing innovation into the future of AI.

There are many leading officials who know how generative AI is slowly but surely turning into a major resource for marketers to bring up ads and performances as well as other assets. It’s a new era that signals competition in terms of providing different services where advertisers purchase through the likes of publishers and linked search engines.

Some people are seeing this as a race that brings in more sponsors as well as advertisers as they are the ones bringing in more business.

The company’s cloud services including its Azure witnessed a staggering 31% growth and then its Productivity and Business units witnessed sales increase by 7%, reaching $17 billion. This particular division entails software linked to Office products such as the likes of Dynamics and even businesses observed through platforms like LinkedIn.

Microsoft’s More Personal Computing unit witnessed sales fall by 19% to around $14.2 billion. This unit entails the likes of Windows PC software, Surface computers, Bing search, and even some advertising too.

The tech giant says it would be incurring around $800 million of costs linked to severance expenses, thanks to the 10,000 firings that were announced in January of this year. This also includes expenses linked to changes made to hardware.

The firm also claims it would be adding more staff and investing in the likes of growth-driven sectors like cloud computing and AI.

The firm did announce new investments in the world of AI after it struck bigger deals with OpenAI which is the owner of ChatGPT and Dall-E.

Read next: Microsoft Begins Efforts To Wind Down Its Windows 10 Home And Pro Support By Ending Sales Of Downloads
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