For Microsoft, Cloud Business Looks More Promising Than Mobile

Microsoft’s chief executive, Satya Nadella, speaking Thursday at an event in San Francisco to advertise how far the company has come in the cloud business.Credit

SEATTLE — One way to judge Microsoft’s effectiveness in responding to new industry-shaking challenges is to look at mobile platforms.

After several years of trying to catch up to Apple and Google with its Windows Phone operating system, Microsoft has almost nothing to show for it. Windows Phone devices accounted for 2.5 percent of new shipments in the worldwide smartphone market in the second quarter, down from 3.4 percent the year before, according to estimates by IDC, a technology research firm. Apple’s iOS made up 11.7 percent in the same quarter, and Google’s Android 84.7 percent.

Cloud computing offers a different picture of Microsoft’s ability to make progress in new markets. A lot of companies are vying to be cloud contenders, and all of them are chasing Amazon, the Internet retailer that years ago began renting out its vast computing infrastructure to other companies and quickly became a leader in the field.

But despite being a laggard in cloud computing, Microsoft has established real credibility. The company’s commercial cloud revenue during its last fiscal year was $2.8 billion, up from $1.3 billion the prior year and $700 million the year before that. Those figures also include cloud revenue from its Office business, not just the server-renting businesses that are more akin to what Amazon offers.

On Thursday, the company’s chief executive, Satya Nadella, hosted an event in San Francisco to advertise how far it had come in the cloud business. He said 80 percent of Fortune 500 companies used Microsoft’s cloud computing infrastructure in some way.

It was a topic Mr. Nadella enjoyed talking about more, presumably, than his recent controversial comments about women and pay raises, for which he has repeatedly expressed his contrition.

At the event, Scott Guthrie, another Microsoft executive, said the company was signing up more than 10,000 new customers a week to Azure, one of its cloud offerings. Microsoft has been furiously building new data centers around the world, the latest of which are located in Australia, to expand its cloud services to new customers.

Mr. Guthrie said Microsoft now has data centers serving 19 regions, twice as many as Amazon and six times as many as Google. He predicted that only those companies and Microsoft would ultimately be able to offer the kind of scale in their cloud computing services to be successful in the business.