Microsoft sets $20B FY18 Commercial Cloud revenue target

|About: Microsoft Corporation (MSFT)|By:, SA News Editor

Microsoft (NASDAQ:MSFT) is aiming for a $20B/year run rate for its Commercial Cloud reporting segment by FY18 (ends June '18), says Satya Nadella at an analyst meeting (webcast) held amid the company's BUILD conference. Microsoft announced last week Commercial Cloud, a term that covers Azure cloud infrastructure/app platform services, commercial Office 365 sales, and Dynamics Online business app sales, was on a $6.3B/year run rate.

Assuming the target is hit, some of that growth will come from the migration of traditional Office and Dynamics licensees to cloud subscriptions. But Nadella promises there will be plenty of other growth as well. "This is not a one-for-one shift. There is actually a pretty significant expansion of the value we can deliver.”

M&A, of course, could also expand the division. Bloomberg reported earlier today cloud CRM software giant Salesforce (current market cap of $47B) was approached by a potential acquirer. Much of the speculation about the rumored suitor revolves around Microsoft and Oracle.

Also: With Windows users now getting free upgrades and Microsoft increasingly looking to monetize the OS via services, the company says it will recognize Windows 10 license revenue over a 3-year period. Windows license revenue has traditionally been recognized up-front.

Earlier: Microsoft launches new developer tools, Azure services

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