Published: Fri, October 23, 2015
Economy | By Melissa Porter

Microsoft's earnings would have looked bad under the old reporting scheme

Microsoft's earnings would have looked bad under the old reporting scheme

This is also the first quarter under a new reporting structure that breaks the company into three main units: Personal Computing (Windows), Productivity and Business Processes (Office) and Intelligent Cloud (Windows Server).

"We are making strong progress across each of our three ambitions by delivering innovation people love", said Microsoft CEO Satya Nadella in a statement. Dell and Microsoft are rolling out a new hybrid cloud solution that aims to help customers overcome barriers to the cloud.

Today Microsoft reported the financial performance it recorded during the first quarter of its fiscal 2016. Revenue - although down - beat expectations and cost cutting had a few success, Lenschow said in a note to clients. Windows OEM revenue declined by 6 percent, but the company noted that this means it is doing better than the PC market as a whole. Revenue from server products and cloud services revenue grew by 13 percent. The strong dollar severely dragged revenue, which fell 12% over the previous year.

Dell has partnered with Microsoft to launch the Hybrid Cloud System, a hardware and software bundle offering, which can help businesses speed up the adoption of hybrid clouds. That business includes results from licensing of the Windows operating system, devices such as mobile phones and Surface tablets, game products including Xbox consoles, and its Bing search business. Analysts say that suggests a healthy interest in the new software, although worldwide Data Corp. estimates overall PC sales still dropped 11 percent in the third quarter.

The company said Office 365, another key cloud-based offering, had about 18.2 million consumer subscribers at the end of its first quarter, an increase of about 3 million from the end of the preceding quarter. For the fourth quarter ended in June, Microsoft took roughly $US8.4bn in writedowns and other charges related to the handset business it acquired from Nokia and said it would reduce its global workforce by an additional 7,800 people. Instead of counting heavily on Windows licensing fees, Smith said, Nadella "is much more focused on cloud computing and other services". The company released new versions of its biggest software products: Windows 10 and Office 2016.

The latter is Microsoft's fastest growing segment, and one where analysts say Microsoft is outshining rivals like IBM and Hewlett Packard.

The business of cloud platformsCloud platforms like AWS, Azure, and Bluemix are considered both PaaS (platform as a service) and IaaS (infrastructure as a service) platforms.

Dell announced the availability of the Dell Hybrid Cloud System for Microsoft, which is built around the new Microsoft Cloud Platform System Standard.

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