The company has shifted focus from its core business of Windows operating system to cloud computing and other digital technologies.
CEO Satya Nadella is steering Microsoft from software to cloud computing and business services, which consequently is resulting in large layoffs at the company.
In recent years Microsoft has cut many jobs in different geographies. In 2015, the technology giant cut 7,800 jobs, and in 2016, it cut 4,700 jobs.
According to Microsoft, the shift in focus toward cloud computing and other services is to better serve its customers and partners. The changes in the company are already on the way and soon, their effect will be out.
The software giant’s focus is to help bring digital transformation for its customers, which is a differentiating factor in todays’ businesses and a huge business opportunity for the company.
While reporting the company earnings for the first three months of the year, Nadella said, “From large multinationals to small and medium businesses to non-profits all over the world, organizations are using Microsoft’s cloud platforms to power their digital transformation.”
According to the report, the cloud and business service operations recorded revenue gains, which helped offset the drop in revenue from the personal computing division.
The core business of Microsoft was Windows operating system, which is being replaced slowly with advancement in technology. This is the reason for the shift in its focus toward cloud computing and other digital technologies.
In a year, Microsoft’s revenue from Intelligent Cloud rose 11 percent to $6.8 billion. The office commercial products and cloud services revenue saw an increase of 7 percent. Also, the subscriber base of Office 365 has increased to 26.2 million which resulted in increase in revenue from office consumer products and cloud service by 15 percent.
The company is also facing stiff competition from Amazon and Google products.