Nadella signals hybrid theme for fiscal year ahead

Microsoft has wrapped up a busy week with its Inspire partner event and its full year financial results coming out using both moments to underline its commitment to the hybrid model.

A lot of the messaging at Inspire was around Azure and the move to cloud but the firm is working with partners to stress the benefits of the hybrid approach.

Speaking to analysts about the fourth quarter numbers, Microsoft’s CEO Satya Nadella said that pushing hybrid was going to be a theme with the channel.

“I actually think that these hybrid used benefits are being sort of best kept secrets. So, I’m actually hoping that going into this next fiscal year, we do a much better job and customers do a much better job, but they don’t benefit because the advantage Azure has because of the hybrid used benefits across the entire workload are pretty phenomenal,” he said.

“We had a good set of sessions at our partner meetings this week just really making sure that everybody understand those benefits. So, I don’t think that, that is really played out. If anything, all the growth we have seen is in spite of that not being broadly revenue driving growth,” he added.

The fourth quarter numbers for the three months ended 30 June showed that the firm had delivered $30.09bn in revenue with net income of $8.9bn slightly ahead of the same period last year.

Office commercial products and cloud services revenue increased by 10% with Office 365 driving that with an increase of 38% year-on-year.  Server products and cloud services were up by 26% with Azure improving by 89%.

Enterprise services revenue improved by 8% and Windows OEM increased by 7%. Windows commercial products climbed by 23% and Surface remains an important area delivering 25% growth.

For the full year the firm smashed through the $100bn barrier with revenues of $110.4bn, a 14% improvement on fiscal 2017, with the cloud driving a lot of that growth.

“We had an incredible year, surpassing $100bn in revenue as a result of our teams’ relentless focus on customer success and the trust customers are placing in Microsoft,” said  Nadella. “Our early investments in the intelligent cloud and intelligent edge are paying off, and we will continue to expand our reach in large and growing markets with differentiated innovation.”

Nadella is fresh from speaking to partners at Inspire on Wednesday using his keynote to cover a range of topics, including the growth of AI and the need to protect privacy as well as his regular themes of helping people collaborate and work smarter.

Reviewing the progress made across all of its divisions in the last fiscal year he told financial analysts that the channel remained a key element of the firm’s success.

“Microsoft has always been a partner-led company, and partners increasingly see more opportunity on our platforms, inspiring leading companies like SAP, Adobe and GE, as well as fast-growing start-ups like InMobi to play an even larger role in our vibrant and growing partner ecosystem, an asset that gives us scale in this new era,” he said.