Sales of Lumia handsets nosedive to 4.5m in Q4

Microsoft has announced earnings for its second fiscal 2016 quarter, which ended December 31, 2015.

Like everyone, Microsoft was keen to highlight fast-growing “commercial cloud” computing sales, which it claims are now running at an annualised rate of $9.4bn.

Office 365 revenue grew almost 70 percent, a sign of Microsoft’s success at diversifying away from Windows.

The commercial cloud sector stood out significantly. It certainly is the case that the numbers look very bad.

Revenue from the “intelligent cloud” business, which includes products such as its Azure cloud infrastructure and services business, along with other noncloud products such as traditional servers, rose 5% to $6.3bn.

Otherwise, Nadella says he’s focused on offsetting the shrinking market by continuing Windows 10 itself more enterprise friendly with new security and compliance features, which will encourage more of the crucial business market to take the plunge and upgrade. Users want to exploit the data they already have in Office365, Nadella noted. On top of that iOS and Android are extremely dominant in the smartphone market. “The cloud is what enables the mobility of experience across all your devices”, he said on the Q&A.

The segment consisting of Windows, hardware, search, and gaming pulled in $12.7 billion in revenue, marking a decline of 5% year over year (down 2% in constant currency). Please see our terms of service for more information.

The company reported a stronger-than-expected adjusted profit, helped by continuing strong sales in its cloud operations.

“Businesses are also piloting Windows 10, which will drive deployments beyond 200 million active devices”, the Indian-born top executive added.

Nadella also indicated that he expects the new security and compliance features of Windows 10 will encourage the crucial business market to upgrade, according to Business Insider. The company only managed to sell 4.5 million Lumias in the last quarter, with revenues down 49 percent year on year.

Revenue was $23.8 billion, down 10 percent from $26.5 billion a year earlier.

Nevertheless, the company’s intelligent cloud group, which includes its Azure service, rose five percent to $6.3 billion.