Microsoft Commits Surge $34Bn to Record High

Have you noticed that Microsoft customer commits (commercial bookings) jumped a staggering 🏆 $34Bn in just one quarter? Earlier this week, Microsoft shared some impressive numbers and insights - let’s break them down.

📈 Azure is at ~$67-73Bn Run Rate Range

“Microsoft Cloud revenue surpassed $135 billion, up 23%,” shared Satya Nadella on Tuesday, with Azure’s share within this total grew by an impressive 29%.

This positions Azure at a $67-73Bn run rate range. A year ago, the CEO noted that Azure was “accounting for over 50% of the total for the first time." Since then, Azure has been growing at an accelerated rate of ~30%, driving the entire Microsoft Cloud growth to 20%+ range.

~$70Bn run rate places Azure right between Google Cloud’s $40Bn annual

revenue and AWS’s $100Bn, both of which have recently reached these significant milestones as hyperscalers continue to grow rapidly.

💰 Commitments Hit Record High

Microsoft's revenue backlog in Q4 grew “significantly ahead of expectations,” according to CFO Amy Hood, as commercial bookings surged by an $34Bn in Q4 alone.

“This record commitment quarter was driven by growth in the number of $10M+ and $100M+ contracts for both Azure and Microsoft 365 and consistent execution across our core annuity sales motions,” she explained.

Microsoft's current commercial revenue backlog stands at $269Bn, up from $235Bn in Q3. This pegs Azure commits at ~$134.5Bn (~50% share).

💜 AI Customer Traction and Stickiness

Azure AI’s customer base has surged ~60% YoY, reaching >60,000 customers. “The average spend per customer continues to grow,” underscored Nadella.

Further, the number of Copilot customers with 10K+ seats 2X QoQ

CEO emphasized that “Copilot SaaS offering, which today is on a growth rate that's faster than any other previous generation of software we launched as a suite in M365.”

In addition to the 60% QoQ growth of seats, CEO highlighted the stickiness of AI-driven solutions:

“The most healthy sign for me is the fact that customers are coming back. The same customers with whom we landed the seats are coming back and buying more seats.

And then the number of customers with 10,000-plus seats doubled, right? It’s 2x quarter over quarter.”

🛠️ Flexible Architecture for Future-Proofing

Crucially, Microsoft’s approach to infrastructure investment is both robust and flexible as the company evaluates demand.

The CFO stressed that: “We’ve built a consistent architecture first with the commercial cloud and second with the Azure stack for AI,

regardless of whether the demand is at the platform layer or at the app layer or through third parties and partners or, frankly, our first-party SaaS, it uses the same infrastructure.”

💡 What does this all mean for cloud GTM and partnerships?

The rapid commits growth and MSFT focus on partners means that partners who can help enterprises use these massive cloud investments will be in high demand.

__________

📈 Accelerate your Growth in Cloud Marketplaces

Transform your marketplace strategy with first-hand insights from Cloud GTM leaders in our 5-week cohort course. Learn in a community of great alliance leaders. Join 100+ alums from companies like GitLab, Darktrace, IDC and others.

Join Cloud GTM Leader course