The Zhitong Finance App has learned that Microsoft (MSFT.US) will begin disclosing quarterly sales for its Azure cloud business unit. Prior to that, Wall Street had criticized the company for a lack of information on its most important growth engine for years, and now Microsoft has changed its attitude.
Investor Relations Director Jonathan Nielsen said in an interview that given the size and volume of Azure, “now seems like the right time to provide greater transparency.”
Microsoft provided quarterly revenue data for Azure over the past two years in a document submitted on Wednesday, showing that it has continued to grow, reaching $29.4 billion in the most recent quarter.
Historically, Microsoft only announced the growth rate of its Azure business (sales data storage and software services), not actual revenue. This has sparked discontent among investors and analysts, who want a better understanding of Azure's performance, which has become a weather vane for Microsoft's artificial intelligence business.
Microsoft announced this planned accounting change, which is the company's first major adjustment to its main reporting division since 2015.
The two original reporting divisions — Intelligent Cloud (Intelligent Cloud, which includes Azure and server products) and Productivity and Business Processes (including Microsoft 365 and the previous Office suite) — will be merged into a single department called “Agents and Infra” (Agents and Infra).
The “More Personal Computing” (More Personal Computing) division, which includes Windows, Search Ads, and Xbox, will be renamed “Devices and Consumer” (Devices and Consumer).
The latest data disclosed by Microsoft shows steady growth in the Azure cloud
Microsoft is also making a number of other reporting changes, including integrating much of LinkedIn's growth with Bing Search and other businesses that rely on ads for revenue. This new structure will officially take effect when the first quarter earnings report is announced in the fall of the new fiscal year.
Microsoft CEO Satya Nadella said in a note on the changes in the report that the development of artificial intelligence “is changing the way we build and operate, while also blurring the boundaries between our products and reshaping our business model.”
The company previously regularly disclosed Azure revenue. Microsoft said that in the fiscal year ending June, the division's annual sales had exceeded 100 billion US dollars, up from 75 billion US dollars in the previous fiscal year, accounting for about 30% of the company's total revenue.
Back in 2015, Steve Ballmer called on Microsoft to be more transparent about cloud sales.
The former CEO and major shareholder of Microsoft said in an interview with the news agency at the time: “This is a key indicator. If they think it's important to the company, they should disclose it.”