Cloud Wars
  • Home
  • Top 10
  • CW Minute
  • CW Podcast
  • Categories
    • AI and Copilots
    • Innovation & Leadership
    • Cybersecurity
    • Data
  • Member Resources
    • Cloud Wars AI Agent
    • Digital Summits
    • Guidebooks
    • Reports
  • About Us
    • Our Story
    • Tech Analysts
    • Marketing Services
  • Summit NA
  • Dynamics Communities
  • Ask Copilot
Twitter Instagram
  • Summit NA
  • Dynamics Communities
  • AI Copilot Summit NA
  • Ask Cloud Wars
Twitter LinkedIn
Cloud Wars
  • Home
  • Top 10
  • CW Minute
  • CW Podcast
  • Categories
    • AI and CopilotsWelcome to the Acceleration Economy AI Index, a weekly segment where we cover the most important recent news in AI innovation, funding, and solutions in under 10 minutes. Our goal is to get you up to speed – the same speed AI innovation is taking place nowadays – and prepare you for that upcoming customer call, board meeting, or conversation with your colleague.
    • Innovation & Leadership
    • CybersecurityThe practice of defending computers, servers, mobile devices, electronic systems, networks, and data from malicious attacks.
    • Data
  • Member Resources
    • Cloud Wars AI Agent
    • Digital Summits
    • Guidebooks
    • Reports
  • About Us
    • Our Story
    • Tech Analysts
    • Marketing Services
    • Login / Register
Cloud Wars
    • Login / Register
Home » Microsoft Cloud Q4: Big Revenue Numbers but Also Big Whiff on Security
AI and Copilots

Microsoft Cloud Q4: Big Revenue Numbers but Also Big Whiff on Security

Bob EvansBy Bob EvansAugust 1, 20245 Mins Read
Facebook Twitter LinkedIn Email
Share
Facebook Twitter LinkedIn Email

While Microsoft posted fiscal-Q4 cloud revenue growth of 21% to $36.8 billion, CEO Satya Nadella continued to claim that his embattled security business is the company’s top priority while simultaneously offering no new information on what he and his team are doing to fix that massive risk.

First, a quick overview of key Q4 numbers for the quarter ended June 30:

  • total cloud revenue of $36.8 billion, up a very impressive 21%;
  • Azure growth of 29% (in the prior quarter, it was 31%);
  • AI contributed eight points of that Azure growth, and “demand remained higher than our available capacity,” Microsoft said;
  • Dynamics 365 growth of 19%;
  • Q1 Azure guidance: for the quarter ending Sept. 30, Microsoft expects “growth to be 28% to 29% in constant currency” with that growth “driven by our consumption business, inclusive of AI, which is growing faster than total Azure”; and
  • CapEx reached a whopping $19 billion, with Microsoft stating that “Cloud and AI related spend represents nearly all of total capital expenditures.”

So, looking at Microsoft Cloud’s performance on revenue and growth, that’s all very impressive —yes, some key growth rates declined slightly, but that’s certainly to be expected with a company that’s now on a fiscal-year run rate of almost $150 billion. Speaking of that total: If Microsoft Cloud were an independent entity, it would be by far the world’s largest enterprise-tech company. By my estimation, the next-largest enterprise-tech company would be AWS, which based on Q1 revenue of $25 billion was on a $100-billion run rate — and I think we can safely guess that when Amazon releases Q2 numbers for AWS later today, that updated run rate will be in the range of $105 billion to $110 billion.

Why the Big Whiff on Security?

But like Sherlock Holmes’ famous dog that didn’t bark, Satya Nadella’s relative reticence on the company’s recent pledge to enact a sweeping and end-to-end overhaul of its security business is, in my opinion, very troubling.

A few months ago, I wrote a series of articles about this potentially disastrous problem for Microsoft, and you can get a very good picture of that challenge in my May 9 analysis headlined “Can Satya Nadella Repair Microsoft’s Badly Broken Security Culture?” That analysis was precipitated by my extensive early coverage of Microsoft’s big problem, which Nadella and the head of Microsoft’s security business, Charlie Bell, addressed in early May with outlines of their plans to fix the broad and deep security challenges Microsoft faces.

So this week’s very visible fiscal-Q4 earnings call was the perfect time for Nadella to offer some thoughtful insights on the progress Microsoft has made and the lessons Microsoft has learned around securing its customers’ data and IT operations, which has become perhaps the #1 tech-related issue for business leaders.

But instead, Nadella offered only a tepid rehash of what he’s said in the past, despite prefacing that mushy overview by saying, “We continue to prioritize security above all else.”

Really? If that’s actually true — and if Microsoft continues to “prioritize security above all else” three months from now when it releases Q1 numbers — then Nadella should trash his standard earnings-call script and talk about that #1 priority of security at the very top of his prepared remarks, rather than burying his discussion of security as the eleventh product group he discussed.

Yes, while “We continue to prioritize security above all else,” Nadella chose not to mention until after he had discussed 10 other parts of Microsoft’s business — and here they are in the order he spoke about them: Azure, Azure AI, Intelligent Data Platform, GitHub, Copilot (more discussion by far of this product group than any other), Industries, Business Apps, Teams, Devices, and then finally Security. But don’t worry — it’s the #1 priority.

Hmm…so I wonder why Nadella expended 142 words discussing Security, but 146 words discussing Microsoft’s Gaming business?

Beats me — maybe in the AI Era, less is more??

And what Nadella actually did say about Security — and don’t forget, “We prioritize security above all else” — was retreaded boilerplate, with absolutely zero new information on how the company is trying to overhaul its security culture, security processes, and security technologies to avoid still more customer disasters. For example:

“We are doubling down on our Secure Future Initiative, as we implement our principles of secure by design, secure by default, and secure operations. Through this initiative, we are also continuously applying what we are learning, and translating it into innovation for our customers, including how we approach AI.”

Okay, sounds comfy and all that — but three months ago, Nadella made essentially the same commitment about the same initiative with the exact same line about “secure by design, secure by default, and secure operations.”

But as far as introspection and transparency, that was it — Nadella devoted his next and final 100 words about that part of the business that “we prioritize…above all else” talking about how big Microsoft’s security business is and how many customers are using it and how wonderful Copilot for Security is proving to be.

Final Thought

Looking at this botched attempt by Nadella and his company to gloss over an incredibly strategic —and potentially dangerous — issue, I am simply stunned that Nadella’s comments were so tone-deaf. And having followed his public commentary for more than decade, I don’t believe for a second that the eloquent and wildly successful Nadella was not aware of the opportunity he had to demonstrate —not just mouth the words, but actually demonstrate — his company’s commitment to providing secure and trustworthy products and services for Microsoft’s customers.

But by saying so little of value about security, Nadella chose not to seize that opportunity.

And ironically, that reticence says a lot.

And none of it is good.


The AI Ecosystem Q2 2024 Report compiles the innovations, funding, and products highlighted in AI Ecosystem Reports from the second quarter of 2024. Download now for perspectives on the companies, innovations, and solutions shaping the future of AI.

Interested in Microsoft?

Schedule a discovery meeting to see if we can help achieve your goals

Connect With Us

Book a Demo

AWS Azure Cloud Cloud Revenue Cloud Wars Cloud Wars Archive Dynamics 365 Earnings Call featured Microsoft
Share. Facebook Twitter LinkedIn Email
Founderuser

Bob Evans

Founder
Cloud Wars

Areas of Expertise
  • AI
  • Cloud
  • Digital Business
  • Innovation
  • Leadership
  • LinkedIn

Cloud Wars Founder Bob Evans actively analyzes the Cloud and AI categories through video reports, in-depth analyses, and interviews with the Cloud and AI market’s leaders and innovators. He’s also the creator of the Cloud Wars Top 10, a ranking and ongoing analysis of the world's most influential tech companies driving digital business and the digital economy. Bob is recognized as a world-class strategic communicator focused on emerging business strategy, disruptive innovation, and forward-looking leadership.

  Contact Bob Evans ...

Related Posts

Microsoft Makes Major Push Into AI Agent Interoperability with New MCP Rollouts

May 23, 2025

Microsoft’s Latest Release Announcements Aimed at Streamlining Agentic AI, Increasing Accessibility

May 23, 2025

Microsoft and OpenAI Could Revise Partnership Terms Ahead of Potential OpenAI IPO

May 23, 2025

IBM Research Sheds New Light on AI Agents’ Impact Across Org Structures, Business Functions

May 22, 2025
Add A Comment

Comments are closed.

Recent Posts
  • Microsoft Makes Major Push Into AI Agent Interoperability with New MCP Rollouts
  • Microsoft’s Latest Release Announcements Aimed at Streamlining Agentic AI, Increasing Accessibility
  • Microsoft and OpenAI Could Revise Partnership Terms Ahead of Potential OpenAI IPO
  • IBM Research Sheds New Light on AI Agents’ Impact Across Org Structures, Business Functions
  • SAP Says Reports of Applications’ Death Are Greatly Exaggerated!

  • Ask Cloud Wars AI Agent
  • Tech Guidebooks
  • Industry Reports
  • Newsletters

Join Today

Most Popular Guidebooks

Accelerating GenAI Impact: From POC to Production Success

November 1, 2024

ExFlow from SignUp Software: Streamlining Dynamics 365 Finance & Operations and Business Central with AP Automation

September 10, 2024

Delivering on the Promise of Multicloud | How to Realize Multicloud’s Full Potential While Addressing Challenges

July 19, 2024

Zero Trust Network Access | A CISO Guidebook

February 1, 2024

Advertisement
Cloud Wars
Twitter LinkedIn
  • Home
  • About Us
  • Privacy Policy
  • Get In Touch
  • Marketing Services
  • Do not sell my information
© 2025 Cloud Wars.

Type above and press Enter to search. Press Esc to cancel.

  • Login
Forgot Password?
Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.