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Microsoft Azure Revenue Growth Slows

Or should we say, flattens out. Microsoft revealed its quarterly earnings figure today, and though it largely met targets, Azure revenue flatlined as revenue growth slowed down.

The flagship cloud product for the company witnessed a 76% growth in the second fiscal quarter that ended December 31. But this was down from a 98% surge the cloud platform witnessed a year earlier., which dragged the company’s revenue and earnings below analyst expectations.

Azure also came in with a 76% increase this past quarter, in September.

Despite this slowing momentum, Microsoft is rapidly picking up business from large companies. The retail industry, in particular, is opting for Azure in order to keep pace with the ecommerce business of Amazon.

This month alone it announced deals with Walgreens and Kroger, to go with the five-year agreement it unveiled with Walmart last summer.

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Microsoft CEO Satya Nadella made it a point to highlight this in his statement:

“Our strong commercial cloud results reflect our deep and growing partnerships with leading companies in every industry including retail, financial services, and healthcare. We are delivering differentiated value across the cloud and edge as we work to earn customer trust every day.”

Redmond forecasted a revenue of between $29.4 billion and $30.1 billion in the current quarter, while analysts were expecting $29.9 billion. For the most part, the earnings came without any major surprises, totaling $32.5 billion.

Azure, which falls into the company’s Intelligent Cloud category that also includes other server products and enterprise services, booked $9.4 billion in revenue, up 20%.

Commercial cloud revenue was also up 48% year-over-year.

The company did say that stronger US dollar would hit growth of its intelligent cloud business segment by around 2%. Microsoft has long courted customers outside the United States, and has a 17% share of the global cloud market, behind 32% that Amazon has to its name.

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