Microsoft Azure revenue grows 93 percent

Microsoft has topped Wall Street forecasts for quarterly profit as it signed up more businesses to its Azure cloud computing services and Office 365 productivity suite.

Much of Microsoft's recent growth has been fuelled by its cloud computing business as more enterprises seek to cut data storage costs by adopting cloud-based software and moving their applications to data centres.

The company's flagship cloud product Azure, which competes with Amazon's dominant cloud infrastructure offering Amazon Web Services (AWS), recorded revenue growth of 93 percent in the three months ended March 31.

Azure's growth has propelled Microsoft to the No. 2 position in the US$15.6 billion cloud computing market with a 14 percent share, behind AWS, which holds a 32 percent slice of the market, research firm Canalys estimated in February.

Revenue at Microsoft's productivity and business processes unit, which includes Office 365, rose 17 percent to US$9 billion, topping analysts' average expectation of US$8.73 billion, according to Thomson Reuters I/B/E/S.

Overall, the software giant's revenue rose 16 percent to US$26.82 billion, ahead of expectations of US$25.77 billion.

Microsoft said net income rose to US$7.42 billion or 95 US cents per share in the third quarter ending March 31, from US$5.49 billion or 70 US cents per share, a year earlier.

Analysts had expected earnings of 85 US cents per share.

Microsoft's shares fell about 1 percent in after-hours trading on Thursday.

Reporting by Laharee Chatterjee. Editing by Sai Sachin Ravikumar