The famous American multinational, Microsoft (NASDAQ:MSFT) is to announce its first quarter earnings on the 23rd of this October. The company has been set on improving its cloud business rather than focusing on its operations. Therefore, the company is spending lesser time on its personal computers and more on developing an ecosystem of value added devices.
Microsoft (NASDAQ:MSFT) is trying to eliminate its PC reliance and increase its way into the mobile hardware market. The company launched its Surface Pro 3 in June to help cater to this new ecosystem. The company also reported that it is to upgrade its Lumia phones soon. Microsoft (NASDAQ:MSFT) is working its way up to the cloud domain as well.
The company’s Office 365 is helping it increase revenues for the company for its Windows Office division. This division makes around 40% of its total revenue. Its Azure platform which makes 24% of its growth in revenues is also doing well. Microsoft (NASDAQ:MSFT) stated that it had more than 5.6 million customers in the fourth quarter of 2014 in its Office 365 from the cloud offerings which doubled from last year.
The company has a market share of about 93% in the software market and it is estimated that the company will see an increase in customers as well as revenue due to its Office 365. The company may have more than $1.7 billion in its annual revenue for its Office 365 in the coming year. The second biggest division of Microsoft (NASDAQ:MSFT) is its Windows Server division which makes nearly 24% for the company.
The Azure platform gains heavy transactions even with the partnerships forming with companies like Salesforce. The platform helps Microsoft (NASDAQ:MSFT) move forward while adopting lower costs. The company can use the increase in SQL demand by focusing more on its Azure platform to help sell its new Business Intelligence tool.
The third largest division of the company is its Windows Operating System. This division totals to 10% of the value of the company. The division has been doing well in terms of its revenues due to the termination Windows XP. The one division that has caused a negative impact on Microsoft (NASDAQ:MSFT) has been its Online Services Division which has continued to post losses.
However, the increase in the penetration of Bing has caused division revenues to increase by nearly 40%. This isn’t something minute being achieved only in the last quarter. Microsoft’s (NASDAQ:MSFT) market share for the U.S. search market industry is increasing rapidly as well. It has increased by about 1.4 in September 2013 in percentage points to 19.4%.
It is expected that this trend will continue to prevail thus reaping in revenues causing the company to gain increased profitability in its earnings announcement. The company is doing pretty well overall with such a healthy quarter of earnings. All it has to do now is to maintain its position and work on the few weak spots it has.