Microsoft studies huge cloud uptick as CMA questions licensing

Microsoft Cloud grew 27%, with income of $46.7bn, in its fourth quarter 2025 monetary outcomes, the tech large has reported. Whereas the corporate has capitalised on linking its giant software program portfolio to cloud-based progress and, specifically, adoption of Copilot synthetic intelligence (AI) providers, the UK competitors watchdog has discovered a few of its licensing practices restrict competitors within the public cloud market.

Analyst Forrester just lately warned that the speedy adoption of Microsoft Copilot is forcing the hand of IT decision-makers. However enterprise IT patrons proceed to be drawn to Microsoft platforms, which bridge on-premise and public cloud IT infrastructure in addition to present a path to cloud-native computing and AI.

Actually, the corporate’s newest monetary outcomes reveal its effectiveness at connecting the dots to ship worth to enterprise IT patrons. Income elevated 18% to $76.4bn in contrast with the identical interval in 2024.

Its M365 industrial cloud elevated income by 18%, with the corporate seeing common income per consumer (ARPU) progress pushed by its E5 and M365 Copilot choices. The corporate stated it skilled 6% progress in paid M365 industrial seats pushed primarily by progress of its small and medium enterprise and frontline employee choices.

M365 industrial merchandise income elevated 9%, which Microsoft put right down to higher-than-expected Workplace 2024 transactional buying, whereas M365 shopper cloud income grew 20%, pushed by a value improve in January, and subscriber progress of 8%.

Income in its Clever Cloud enterprise grew 26% to $29.9bn. This was pushed by 27% income progress in its server merchandise and cloud providers, and Azure and different cloud providers income, which posted progress of 39%.

When requested about demand for the Microsoft Azure cloud, CEO Satya Nadella referenced the corporate’s current win with Nestlé, which is shifting its SAP system from on-premise to the Azure public cloud. Nestlé migrated six ageing, regionally distributed on-premise datacentres to the Microsoft cloud platform, deploying Rise with SAP on Azure to unify and modernise its SAP panorama.

He described the migration as “a basic instance”, which, in response to Nadella, is a reasonably wholesome enterprise, and is prone to develop much more. “It seems that we’re nonetheless not wherever near the end line,” he added.

Nadella predicted that solely half of such on-premise to public cloud migrations have but to be accomplished.

The opposite progress space for the Azure enterprise is deploying workloads for cloud native computing. “These are scaling in a giant means,” he stated.

With a few of these deployments, Nadella stated organisations are shifting to Azure for its AI capabilities. “These all construct on one another, which is what’s driving our progress,” he added.

how Microsoft sees the monetisation of AI, Nadella spoke concerning the relationship between the know-how and demand for higher computational energy. “When you even subscribe to the perspective that intelligence is principally a number of compute, meaning compute goes to develop, and also you’ve received to make use of it as effectively as doable to simply maintain creating intelligence,” he stated.

Nadella identified that AI makes use of information layers and utility servers, which must be deployed on IT infrastructure. He expects these might want to develop by an order of magnitude. Then, there may be the storage and compute necessities of AI-accelerated graphics processing models (GPUs). “The opposite factor we observe is that each GPU requires storage and compute,” he added.

The quarterly outcomes have been revealed simply earlier than the Competitors and Markers Authority (CMA) within the UK revealed its remaining report competitors within the public cloud market. The CMA reported that Microsoft’s licensing practices have the impact of decreasing competitors in cloud providers markets by adversely impacting the competitiveness of AWS and Google within the provide of cloud providers. “These licensing practices are a function that, together with the opposite options we’ve recognized, together with Microsoft’s giant and rising market share in these markets, additional restricts the already restricted alternative and attractiveness of different merchandise and suppliers,” the CMA stated.