Microsoft’s cloud revenue grows, while IBM’s fades

This is a tale of two cloud players, both old-guard IT firms with vested interests in on-premises software sales. One is making a very successful transition to the cloud era, while the other is failing badly. And it’s a familiar story. Microsoft is kicking butt, and IBM is getting its butt kicked.

In its most recent quarter, Microsoft announced revenues of $23.3 billion, $7.43 billion of that comes from what it calls “the Intelligent Cloud,” including Azure, a 97 percent year-over-year increase. There was another $8.45 billion from the Productivity and Business Process business, which includes Office and Office 365. The company did not separate out the installed software sales from the on-demand version, but it did say that for the first time, Office 365 is outselling the on-premises version.

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It was a busy quarter for partnerships, as well. Microsoft acquired Cloudyn in June to help Azure customers manage and optimize their cloud usage, it joined the open source Cloud Foundry Foundation as a gold member, and it expanded its partnership with cloud storage provider Box.

IBM, on the other hand, isn’t doing too well, and it hasn’t been for some time. The company has reported steadily declining revenue every year since Virginia “Ginni” Rometty took over. Why she still has a job is a mystery, but then again, Microsoft hung on to Steve Ballmer for far too long as well.

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