Microsoft revenues up 12 per cent as Nadella explains reorganisation

Microsoft re-organisation to unite operating system teams as it posts full-year revenues up 12 per cent

Despite a tough year in which its Windows 8 operating system struggled to sell, the replacement of the CEO and the announcement of big job losses, Microsoft has posted a 12 per cent increase in revenue to $86.8bn in the year to the end of June.

Operating income weighed in at $27.8bn, though, up by just four per cent, while the costs associated with the recently announced restructuring and absorption of the Nokia Devices and Services (NDS) will cost between $1.1bn and $1.6bn.

However, the company claimed that its Office 365 and Azure cloud offerings had grown by more than 100 per cent, with total commercial cloud revenue increasing by 147 per cent.

On the results conference call, CEO Satya Nadella talked about the next version of Windows, internally codenamed Windows Threshold. This would continue the aim of Windows 8 to provide a unified operating system that can work across desktop and mobile devices, he said.

"In the past we had multiple teams working on different versions of Windows. Now we have one team with a common architecture. This allows us to scale, create Universal Windows Apps," said Nadella

Part of the aim of Nadella's reorganisation is to unite the separate development teams that have been working on different operating systems - Windows 8 on both Intel and ARM, Windows Phone 8 and the operating system that underlies the Xbox games console.

While Microsoft will continue to sell different "editions" of Windows targeted at different users and devices, but the underlying platform will be more unified and developers will find it much easier to port an application from one edition to the next.

The Surface tablet appears to be finally selling in respectable quantities, with revenues of $409m posted in the fourth quarter. It comes after a massive $900m write-down on unsold versions of the original Surface RT and Surface Pro after they were launched in 2012.