Microsoft Is Officially a Turnaround Story

An edited version of this column 1st appeared Friday in the BostInno Beat. Everything’s coming up Microsoft. OK so maybe not the Windows Phone (RIP), but Satya Nadella’s other big pushes to revive the company seem to be working out. Most recently, $MSFT on Thursday reported strong beats on earnings and revenue in the last quarter of the year (the firm's fiscal Q2), and on Friday Microsoft's stock price responded by rising 5.8 percent to $55.09 a share. The success in the quarter came on the back of growth in cloud services, Office 365 and Windows 10: • Microsoft’s Intelligent Cloud—which includes Azure, cloud services and server products—was its fastest-growing division for the quarter, up 5 percent year-over-year to $6.3 billion. "We are now one of the two leaders in this space," Nadella said during the company's quarterly earnings call with analysts, Thursday, referencing Microsoft's No. 2 ranking behind Amazon Web Services ($AMZN). "And we're the only one in this market providing SaaS, PaaS and hybrid cloud at scale. Our unique approach is resonating." • Meanwhile, Windows 10 is growing at a strong clip: the operating system is now running on 200 million devices, up from 110 million devices at the end of the previous quarter. And the online version of Microsoft's popular Office software suite, Office 365, added 2.4 million subscribers during the quarter for a total of 20.6 million. With Nadella a few days away from his 2nd anniversary as CEO, it's feeling acceptable at this point to call it a turnaround for Microsoft. “It's a totally different vibe coming out of that place that it was three years ago,” UBS analyst Brent Thill told the Australian Financial Review on Friday. Given Microsoft’s major presence in Kendall Square, all of this would seem to have positive implications for Boston, too.