Where’s Azure, and 4 other takeaways from Microsoft’s earnings

For all of Microsoft’s(s msft) huge investment in the Azure cloud computing platform, there was scarcely mention of the multi-billion-effort on Thursday’s fourth quarter and fiscal year 2012 earnings call. Here are the top five takeaways from the call.
1: Yahoo deal disappoints. The search revenue Yahoo(s yhoo) derived from a Microsoft partnership last quarter again fell short of its threshold. Under terms of that three-year old deal, Yahoo replaced its own search engine with Microsoft Bing and Microsoft pays Yahoo a fee based on a traffic generated on Yahoo’s network. Asked if Yahoo(s yhoo) had an “out” on this deal, Microsoft CFO Peter Klein did not answer, saying only that Microsoft will “continue to drive those gains which will benefit both parties of the partnership.” As SearchEngineLand’s Danny Sullivan notes, it’s possible that Yahoo, now led by former Google(s goog) exec Marissa Mayer, could look to tighten ties with Google instead.
2: Lync is hot.   What was once called Microsoft Office Unified Communications Server is hot, hot, hot, according to Klein. Revenue for this, the latest Microsoft Office server SKU which melds voice, email and instant messaging, was up 45 percent for the quarter. “We think unified communications is a really big market opportunity for us ..  we are really starting to see it with this version of Lync, and what we are doing going forward.”
3: Light cloud talk.  There was nary a question about cloud on the call and CFO Klein quickly touched on Windows Azure in his remarks despite Azure representing a good segment of Microsoft’s future. The Redmond giant is clearly banking big on Windows Azure as it tries to build its cloud computing credibility and navigate the tricky transition from its huge reliance on on-premises, client-server software. Klein said Windows Azure in the quarter saw “significant customer and partner wins, and we added roughly 800 new enterprise  customers.”
4: Server and tools sales remain robust.  Revenue for this group was up 13 percent year over year and Microsoft especially touted continued SQL Server adoption — revenue from that database was up $500M year over year. More customers are moving to multi-year server license agreements versus one-off “transactional” license sales.  Microsoft wants customers to sign up for these multi-year deals because they bring repeatable, predictable revenue. Those multiyear licenses should account for 60 percent of the division’s revenue next year, the company said.
5: Wait till next quarter(s). Klein repeatedly cited big product launches — especially Windows 8 and the latest Office — to come later this year. (Windows 8 has been promised for late October. (Timing on Windows 8 Phone was less clear although folks expect Windows 8 Phone devices to hit the shelves in November — just in time for Christmas.) “Enthusiasm is building for the coming year that includes important releases from Windows, Windows Phone, Office and Windows Server,” Klein said.
In other words, if you don’t like what you see from Microsoft this quarter, wait one more (or maybe two.)
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