Bottom line: Microsoft’s business continued to grow in 2020 amid a surge in demand for PCs as well as businesses that have undergone digitization efforts and chose the firm’s security services. Some of the revenue increase was also due to consoles, but continued supply issues may have limited that to some degree.
Microsoft’s latest financial report is in, and it marks the first time the company has made a separate note of revenue that comes from its cybersecurity services. The reason is simple: this revenue stream amounts to no less than $10 billion over the past twelve months. That’s a 40% year-over-year increase on a business that is now generating 7% of the company’s total revenue.
Microsoft CEO Satya Nadella told investors during a call that “we waited in some sense until this milestone to show the depth, the breadth, the span of what we’re doing.”
The $10 billion figure came from products like Azure Active Directory, Azure Sentinel, Azure Monitoring, Azure Information Protection, Office 365, Microsoft Defender for Endpoint, Microsoft Information and Governance, and Microsoft Cloud App Security.
Nadella also noted the increase in demand for cybersecurity services has prompted the company to consider substantial investments for developing more capabilities over the next decade. That’s a smart move for a company whose PC operating system still dominates in terms of market share and, as such, attracts a great deal of malicious actors looking for every opportunity to break its security and steal sensitive data from both personal and enterprise systems.
Otherwise, the total revenue for the fiscal quarter ending in December 2020 was $43.1 billion, which is a 17% increase when compared to the same period in 2019. Net income was $15.5 billion, which is an even more impressive 33% year-over-year increase.
Most of the growth seen is thanks to strong demand for Microsoft’s cloud business, as well as strong sales of the company’s Xbox Series X and Xbox Series S, even if they didn’t sell quite as well as Sony’s PlayStation 5.