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DYNAMICS, CLOUD REVS UP 7 PERCENT Featured

Amy Hood, MicrosoftMicrosoft has reshaped its categories for revenue for the year ended June 30. As it reported results for fiscal 2017, the software said "Dynamics products and cloud services revenue" increase 7 percent, 9 percent in constant currency. That's a bit different than saying Dynamics revenue rose that much isn't it?

The company also reported Dynamics 365 revenue growth of 74 percent over the prior year, 75 percent in constant currency. Since that is a new product and we do not know actual revenue, it leaves us open to some guessing. Microsoft does not report dollar amounts for any Dynamics results. It also did some creative grouping in reporting a commercial cloud annualized revenue run rate. That is calculated by taking revenue in the final month of the quarter multiplied by twelve for Office 365 commercial, Azure, Dynamics 365, :and other cloud properties". Maybe they could make this vaguer if they tried? In the week's earnings webcast, CFO Amy Hood noted, "Dynamics 365 will continue to drive our cloud mix higher" in fiscal 2018. Microsoft did fall in line with one trend in the software industry—services revenue rose while product revenue fell. Product revenue for 2017 was $57.19 billion, down 7 percent for $61.5 billion the prior year. Services revenue rose to $31.76 billion, an increase of 37.5 percent from $23.82 billion the prior year.

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