Score one for Microsoft. At 48 years of age, the software giant may be old by tech standards, but it’s performing better than younger rival Alphabet, as their March quarter numbers showed today. Both companies posted better results than they had for the December quarter, although that’s a low bar, given that neither showed much growth at all then. For the most recent quarter, Microsoft reported 7% higher revenue as growth in its cloud business and commercial software sales helped offset the bottom falling out of devices and PC-related software sales. In contrast, Google parent Alphabet eked out just 3% top-line growth, a result of the stalled digital ad market, which accounts for most of its revenue.
Alphabet had some good news to highlight, however. For the first time its cloud computing unit turned an operating profit, of $191 million. You’d have good reason to be wary of that number: Alphabet revealed on Friday that it changed how it allocates costs against its businesses in a way that made the cloud unit’s bottom line look much healthier. Still, let’s not be nitpickers. Google Cloud’s revenue increase of 28%, in a period when companies are scrutinizing spending on IT, is a decent result. And it shows the wisdom of Alphabet keeping its investment in the business, which reduces its reliance on advertising.
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