Microsoft CEO Satya Nadella has hailed Teams’ aggregation of dozens of platforms as its “biggest breakthrough” after the vendor reported bumper quarterly numbers.
Nadella was speaking as Microsoft revealed its sales rocketed 17 per cent year on year during the quarter ending 31 December 2020, to $43.1bn.
Operating income rose 29 per cent to $17.9bn.
Speaking to investors, Nadella hailed Teams as “bringing together multiple capabilities” from across the Microsoft portfolio, as well from third parties.
“It brings together chat, meetings and collaboration – that is office collaboration as well as business process workflow – all into one scaffolding,” he said. “That’s the biggest breakthrough of Teams.
“In the past, obviously, we had suites of tools, but this is the first product, more so than Outlook even, in terms of being able to integrate communications, collaboration and business process”
The chief exec claimed that Teams is becoming the “de facto unified communications platform of choice for every organisation”, explaining that businesses are creating custom solutions that can integrate their existing applications into Teams.
He highlighted this process as being particularly successful for companies that have bespoke line-of-business applications built before the age of SaaS – in areas such as HR and finance – that want to bring all of these systems together.
“It’s no longer enough to just adopt technology,” he said. “Businesses need to build their own technology to compete and grow.”
Teams is now deployed to over 117 companies with over 100,000 users, he revealed, with more than 2,700 companies deploying over 10,000 seats.
The number of daily active users stands at 60 million on the mobile application alone. Nadella did not offer an overall DAU number, with the most recent figure given as 115 million last October.
The CEO did not offer a direct answer when asked if Salesforce’s acquisition of Slack is driven by concerns that Microsoft has integrated its Salesforce competitor, Dynamics, into Teams – although he seemed to agree.
“Of course, [there are] integrations into Dynamics and integrations into all SaaS applications – whether it’s Workday, SAP, ServiceNow and even Salesforce – all of these applications are getting integrated into Teams very rapidly. That’s the power of Teams as a platform capability that we are seeing.”
Nadella’s comments on Teams echoed a recent interview where he claimed that the platform could become as big as the internet, referring to how it is being used as a hub for numerous other applications and services.
Microsoft saw year-on-year revenue growth across all the product lines it breaks out during its earnings (see below), with Azure (50 per cent), Xbox (40 per cent) and Dynamics 365 (39 per cent) leading the pack.
The vendor has never broken out Azure revenue in the same way that Amazon does for AWS, but this latest quarter is the second in a row where sales growth has accelerated.
| Revenue Percentage Change Y/Y | |
| Office Commercial products and cloud services | 11% |
| Office 365 Commercial | 21% |
| Office Consumer products and cloud services | 7% |
| 23% | |
| Dynamics products and cloud services | 21% |
| Dynamics 365 | 39% |
| Server products and cloud services | 26% |
| Azure | 50% |
| Windows OEM | 1% |
| Windows Commercial products and cloud services | 10% |
| Xbox content and services | 40% |
| Surface | 3% |
| Search advertising excluding traffic acquisition costs | 2% |
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