Microsoft Corporation (MSFT)’s Fiscal Year 2015 Second Quarter Earnings Conference Call Transcript

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In fact this quarter is the 6th consecutive quarter of triple digit revenue growth in commercial cloud and we are now at a run rate of $5.5 billion. Azure services continue to grow in appeal to enterprise IT and developers with rapid improvements across hybrid services, premium cloud storage and virtual machine offerings, enhance data and data analytics offerings. Microsoft enterprise mobility suite is one key area of product innovation that I would like to highlight given the growth in the uniqueness of this offering. Microsoft offers a comprehensive solution for all devices that brings together mobile device management, mobile application management, hybrid identity management and data protection into one unified offering through EMS. Office 365 now includes new application experiences on all phones and tablets for mobile productivity, further we have released completely new scenarios.  This includes Office Sway for visualizing and sharing ideas, Delve to help search and discover content, Office 365 groups to make it easier to collaborate, Office 365 video for secure media streaming for businesses. Finally we continue to invest in enterprise value by integrating MDM and enterprise mobility suite into office 365, new encryption technologies, compliance certification and new E-discovery capabilities in exchange.

In dynamics CRM online, we added 53 markets this quarter bringing us 130 markets around the world.  We are bringing together CRM with Cortana, Yammer, Power BI and Skype to add unique value to customers. We are expanding our capabilities in the cloud through 5 new acquisitions, last week we announced an agreement to purchase revolution analytics, the leading provider of statistical computing and predictive analytics which will enable our customers to unlock big data in sites. We bought Hockey App, a leading mobile app testing and development service to enhance azure services for mobile developers. Our acquisition of Arvato accelerates our ability to give customers unique security capabilities by tapping into behavioral intelligence on our identity and access spending on premise and the cloud. We are bringing on new capabilities in machine learning as applied to e-discovery and other enterprise compliance processes with the acquisition of Equivio and we also welcomed Acompli, a provider of innovative mobile e-mail applications for IOS and Andriod. The common theme across all these acquisitions is advanced data analytics and machine learning driven capabilities that improve with more customer adoption and usage of the cloud.  We are also making progress in our consumer cloud services. Office 365 home and personal revenue grew nearly 150% year-over-year as we added 2.1 million net new subscribers since last quarter.  Bing US-search share continues to grow as the search revenue with 23% growth this quarter.

I will talk about our progress in Xbox live later in my comments. Now let’s turn to Windows, to start the overall Windows ecosystem is driving more innovation over the holiday season at CES.  Our partner showcased the diverse lineup of Windows devices including more premium device choices than ever. Last spring we made a strategic decision to introduce new Windows pricing program to drive unit growth and opening price point PCs as well as tablet and in this quarter we saw year-over-year growth.

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