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Microsoft Rides Cloud to a 21% Increase in Profits

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Microsoft Rides Cloud to a 21% Increase in Profits


SEATTLE — Microsoft doesn’t have an iPhone. It isn’t the Everything Store. It isn’t a verb for “search.”

But it sure is good at making money.

The company reported earnings Wednesday afternoon, and results show that it continued to reel in huge profits. Microsoft reported $33.1 billion in sales for the latest quarter, up 14 percent from a year earlier, and $10.7 billion in profit, up 21 percent. The results easily beat analyst expectations.

While Microsoft’s past was built largely on the back of its Windows operating system, its future firmly rests in the cloud. It has steadily risen to be the No. 2 provider of cloud computing services, behind Amazon’s AWS, which all but created the market. And Microsoft is closing in on Amazon’s lead, analysts say.

Here are three major reasons.

Microsoft’s offerings used to lag far behind Amazon’s. But as Satya Nadella, Microsoft’s chief executive, has thrown its weight behind a transition to cloud computing, the company has been catching up on the product front. Microsoft is just a year behind Amazon now, and it has some advantages with large customers, said Keith Weiss, an analyst at Morgan Stanley.

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