Microsoft has re-iterated its belief in a mythical annual income of $20bn from cloud despite growth in Azure and its apps-as-a-service business slowing.
Backed by the company's massive Azure cloud computing infrastructure, the Intelligent Cloud segment grew revenues by 3 percent (8 percent in constant currency) to $6.1 billion.
Total revenue in Intelligent Cloud grew 3 percent to $6.1bn (£4.3bn), but analysts had expected revenue of $6.28bn (£4.4bn).
The commercial cloud annualized revenue run rate-the forecast number that former Steve Ballmer dismissed as "bullshit"-crept up to $10.0 billion; three months ago, it was estimated at $9.4 billion".
Excluding one-time items, Microsoft earned 62 cents per share. In an email, Mark Moerdler of Bernstein Research said Microsoft's earnings per share would have met Wall Street expectations if not for a "tax technicality". This growth is driven by strong adoption across cloud services.
As a result of this, shares of Microsoft fell almost by 5% in the after-hours trading.
More Personal Computing business is expected to generate revenue of $8.7 to $9 billion. However, operating profits in the segment grew by 57 percent to reach $1.65 billion.
He also provided an update on the progress of Windows 10. As a result, revenue derived from Windows Phone sales declined by $662-million or by 47 percent year over year.
Windows 10 is the fastest-growing version of Microsoft's operating system, and as of Thursday, it had been installed on 270 million devices, representing 35% growth from the previous quarter.
In fact, aside from the company's US$900-million write-down related to woeful Surface RT sales in 2013, the Surface line has shown impressive growth with each quarter.
In a few bright spots, the company said sales of its Surface tablet computers rose 56 percent to $1.1 billion, while revenue from ads shown with results from its Bing search engine grew 55 percent to $1.5 billion.
The optimism stems from its success in transitioning legacy software businesses like Office to a cloud business model in which customers subscribe to the applications. On the consumer side, there are 22.2 million Office 365 subscriptions, up 6%. Ms. Hood said Office 365 "helps pull along new usage of Azure". "It remains clear we are one of the two leaders in the market".
"Microsoft understands enterprise customer needs", he said.
Revenue at the Redmond, Washington-based software giant fell to US$20.53 billion (RM80.32 billion) from US$21.73 billion, lower than the US$22.09 billion analysts had expected.
Jedinak's Crystal Palace into FA Cup finalWatford also rested players in midweek and Troy Deeney and Odion Ighalo are among those expected to return. This is a different team, a different spirit in the team that we had then.
Source: Microsoft Q3 2016 Earnings Report Shows Windows Phone Drop, Surface Rise
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