Microsoft on Tuesday announced its results for the quarter ended June 30, and it appears to be well on its way to its goal of $20 billion in cloud revenue by 2018.
The company said that its annual cloud revenue run rate was $12.1 billion.
But if you’re tracking the horse race between Microsoft and Amazon in cloud computing, that’s still a bit of a misleading number.
The “run rate” is calculated by taking revenue in the final month of the quarter and multiplying it by twelve, as if that month’s revenue will hold for the next year. (In truth, it should probably grow.)
However, included in that number is revenue for Office 365 commercial (versions sold to businesses) Dynamics Online (its competitor to Salesforce), and other cloud properties, as well as Azure, its director competitor to Amazon Web Services.
That means, all we know for sure is that Azure on its own is below a run rate of $12.1 billion, probably well below. We just don’t know by how much.
In comparison, Amazon Web Services is on track to do over $10 billion of revenue in its current fiscal year.
When Microsoft closes its purchase of LinkedIn, it will likely count LinkedIn’s revenues as “cloud” revenue and blow past that promised $20 billion. But that still might not make Microsoft bigger than Amazon in Amazon’s part of the cloud computing world.
We do know that Azure is growing. Whatever that revenue number is, Microsoft says it more than doubled: growing 102% over the year-ago number.
More importantly, it said that Azure compute usage more than doubled year-over-year, too.
That usage stat is important because many Microsoft customers get Azure “credits” tossed in when they renew their contracts, which can be counted toward Azure’s revenue, in a try-before-you-buy way. But they need to use those credits and keep using Azure for Azure to really grow.
So doubled usage is encouraging, too, if also vague.
Microsoft lumps Azure revenue into its its “Intelligent Cloud” segment for financial reporting. Again, that name is also a bit misleading as it includes a lot of Microsoft’s server software, not sold via the cloud, but sold via traditional software licenses. This includes its database Microsoft SQL Server, Windows Server, and its IT management software System Center.
That cloud/server software unit was up 7% (up 10% in constant currency) to $6.7 billion with the server software portion was a significant chunk of that up 5%.
Microsoft’s other cloud products, including Office 365 and Dynamics are also growing well, up 5% to $7.0 billion for the quarter.
All told, Microsoft finished the quarter, which was Q4 of its 2016 fiscal year, with $22.6 billion in revenue, excluding special items, and finished the year with nearly $92 billion in revenue, excluding items. That’s down a little over 2015, $93.6 billion.
NOW WATCH: This video proves the US Navy and US Marine Corps have the best diving boards and swimming pools
Business Insider Emails & Alerts
Site highlights each day to your inbox.