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What Microsoft’s FQ3 2024 Earnings Reveal About Azure

Microsoft announced its fiscal Q3 2024 results, demonstrating robust growth. The company reported a total revenue of $61.9 billion, a 17% increase year-over-year, primarily driven by the cloud segment.

Microsoft’s Cloud business, which includes Azure and other cloud properties, generated over $35 billion in revenue, up 23%. During its earnings call, Microsoft said that Azure’s expansion and the increasing demand for AI infrastructure propelled much of its growth.

Taking a closer look at Microsoft’s overall cloud business:

  • Strong Revenue: Microsoft’s cloud revenue surpassed $35 billion, up 23% year-on-year.
  • Azure Growth: Azure was pivotal to this revenue growth. Its strategic partnership with OpenAI and the diverse selection of AI accelerators contributed to its success. Azure’s AI services added 7 points to its growth, showing its ability to exploit the demand for AI-driven solutions.
  • Diverse Customer Base: Over 65% of the Fortune 500 use Azure OpenAI services. Additionally, the earnings call mentioned notable billion-dollar-plus multiyear commitments from companies like Coca-Cola and Cloud Software Group.
  • Azure AI’s Expanding Customer Base: Azure AI customers continue to grow, with companies like CallMiner, LTI, Mindtree, PwC, and TCS utilizing Azure’s AI capabilities. Azure Arc has over 33,000 customers, indicating strong adoption of its cloud migration services.
  • Cross-Industry Cloud Solutions: Microsoft is bringing AI-powered transformation to every industry. Examples include DAX Copilot in healthcare, used by more than 200 healthcare organizations, and Microsoft’s manufacturing cloud services, utilized by companies like BMW and Siemens.
  • Microsoft Fabric: This next-generation analytics platform has over 11,000 paid customers. It’s integrated with Azure AI Studio, enabling customers to run models against enterprise data consolidated in Fabric’s multi-cloud data lake, OneLake.


Microsoft continues to show solid growth and resilience in its cloud business.

AI is a crucial driver of Azure’s solid growth and resilience. Microsoft’s partnership with OpenAI and its varied selection of AI accelerators, including those from NVIDIA, AMD, and its own internally-developed silicon, continue to fuel Azure’s momentum. AI also positions Microsoft Azure as a leader in AI infrastructure. This clearly resonates with Microsoft’s enterprise customers, with the company revealing that Fortune 500, with over 65% of Fortune 500 companies are using Azure OpenAI services.

Microsoft Fabric, the next-generation analytics platform, contributes to the cloud business’s strength. With over 11,000 paid customers, it’s integrated with Azure AI Studio, enabling enterprises to run models against data consolidated in Fabric’s multi-cloud data lake, OneLake.

Microsoft’s robust cloud business is supported by its broad industry reach, supporting cross-industry cloud solutions for healthcare, manufacturing, and more.

Microsoft’s earnings report paints a compelling picture of a thriving business with the cloud segment at its core. The notable revenue growth, driven by the robust performance of Microsoft Cloud and the expanding reach of Azure, reaffirms the company’s leading position in the technology industry.

The surge in cloud-related revenue, coupled with a strong focus on AI infrastructure, highlights Microsoft’s ability to meet the evolving demands of businesses. The combination of diverse customer adoption and ongoing commitment to technological advancement sets the stage for Microsoft to maintain its momentum for the foreseeable future.

Disclosure: The author is an industry analyst, and NAND Research an industry analyst firm, that engages in, or has engaged in, research, analysis, and advisory services with many technology companies, which may include those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.