Microsoft has increased its commercial cloud revenue 88 percent in the fourth quarter of the financial year, offsetting the losses in its hardware and operating systems business.

“Our approach to investing in areas where we have differentiation and opportunity is paying off with Surface, Xbox, Bing, Office 365, Azure and Dynamics CRM Online all growing by at least double-digits,” said Satya Nadella, chief executive officer at Microsoft.

Overall, the company made $22.2 billion in revenues for the quarter ending on June 30, resulting in a $2.1 billion operating loss.

Total revenues for FY 2015 stood at $93.6 billion, with total operating income of $18.2 billion.

Microsoft will be looking to the release of Windows 10 as a way to boost its sales in the upcoming year - although the OS itself will be distributed to most customers for free.

Microsoft Azure

Shifting weight

The results for the past quarter appear poor, since they include the impact of the $7.5 billion acquisition of the Nokia devices and services business in addition to $940 million in restructuring charges. Excluding this impact, operating income would have totaled $6.4 billion.

Microsoft’s cloud business was responsible for a total of $8 billion in revenue in FY 2015 – we should note that this figure includes not just the Azure cloud, but online services like Office365 too, so it shouldn’t be compared ‘like-for-like’ to the annual results of AWS or SoftLayer.

The surge in cloud business contrasts with just $2 billion the company made in FY 2015 by selling computers and gaming hardware.

Piers Linney, Co-CEO of British cloud services provider Outsourcery, said that far from disappointing, the results indicate that Microsoft is successfully shifting its focus from on-premise to remote infrastructure.

“The growth of cloud brought a number of challenges to many of the established players in the industry who have had to rapidly adapt to new business models as a result. These latest results from Microsoft, while mixed, show that it has held its strong footing in what is a rapidly expanding cloud market,” said Linney.

“Working with Microsoft enables us to deliver expertise in an offering that is always reliable and best-of-breed. Microsoft’s latest cloud sales result justifies our decision to remain Microsoft-centric and shows that the strength of Microsoft, and Outsourcery in turn, will only continue.”