Lucrative Cloud Computing Division Fortifies Microsoft as Recession Fears Linger

While consumer demand in the personal computing sector has waned amidst inflation and economic volatility, tech juggernaut Microsoft — built on PCs and software — has backup options. Notably, the company’s cloud business has quietly become one of its biggest drivers of revenue and growth, ranking it second in market share behind Amazon Web Services. For the quarter ending on September 30, 2022, Microsoft’s cloud revenue reached $50.1 billion, up 11% year-over-year (YOY), while the company’s gaming and original equipment manufacturing (OEM) divisions fell by 3% and 15%, respectively.

Become a Subscriber

Please purchase a subscription to continue reading this article.

Subscribe Now

Microsoft also showed strong growth from its business-centric social media network, LinkedIn. Despite a drop in advertising revenue, the platform experienced revenue growth of 17% YOY, which exceeded the company’s expectations. However, it’s the company’s cloud computing business that is bolstering the company as other sectors decline, accounting for half of the total revenue for the quarter.

Microsoft is still susceptible to market conditions, and as consumer spending wanes and recession fears linger, the company may fall short of guidance — but not enough to question the company’s resilience.