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Office 365 numbers in Microsoft Q3 FY18 results

%3CLINGO-SUB%20id%3D%22lingo-sub-187786%22%20slang%3D%22en-US%22%3EOffice%20365%20numbers%20in%20Microsoft%20Q3%20FY18%20results%3C%2FLINGO-SUB%3E%3CLINGO-BODY%20id%3D%22lingo-body-187786%22%20slang%3D%22en-US%22%3E%3CP%3E%3CSPAN%3EInteresting%20points%20from%20yesterday's%20Microsoft%20FY18%20Q3%20earnings.%20Office%20365%20is%20now%20at%20135%20million%20monthly%20active%20users.%20The%20consumer%20number%20is%20now%2030.6%20million%20(folks%20who%20license%20Office%20365%20Home).%20On%20the%20commercial%20side%2C%20Microsoft%20reports%20annualized%20revenue%20for%20commercial%20cloud%20products%20at%20%2424%20billion.%20Goldman%20Sachs%20(at%20the%20earnings%20call)%20said%20that%20they%20estimate%20Azure%20to%20be%20%248%20billion%20of%20that.%20Most%20analysts%20think%20Dynamics%20365%20is%20another%20billion%2C%20so%20that%20leaves%20around%20%2415%20billion%20ARR%20for%20Office%20365.%20Dividing%20that%20by%20their%20monthly%20active%20users%2C%20it's%20annual%20RPU%20of%20%24111%2C%20or%20around%20%249.25%20monthly%20RPU.%20Given%20Microsoft's%20push%20to%20convince%20tenants%20to%20buy%20higher-priced%20E3%20and%20E5%20licenses%20and%20add-ons%2C%20there's%20plenty%20of%20room%20for%20growth%20in%20Office%20365%20revenues...%3C%2FSPAN%3E%3C%2FP%3E%3C%2FLINGO-BODY%3E%3CLINGO-LABS%20id%3D%22lingo-labs-187786%22%20slang%3D%22en-US%22%3E%3CLINGO-LABEL%3EOffice%20365%3C%2FLINGO-LABEL%3E%3C%2FLINGO-LABS%3E%3CLINGO-SUB%20id%3D%22lingo-sub-187880%22%20slang%3D%22en-US%22%3ERe%3A%20RE%3A%20Office%20365%20numbers%20in%20Microsoft%20Q3%20FY18%20results%3C%2FLINGO-SUB%3E%3CLINGO-BODY%20id%3D%22lingo-body-187880%22%20slang%3D%22en-US%22%3E%3CP%3ENever%20confuse%20the%20pursuit%20of%20profit%20(which%20must%20be%20done%20to%20serve%20shareholder%20interests)%20with%20the%20pursuit%20of%20quality%20(which%20shareholders%20don't%20care%20much%20about%20as%20long%20as%20problems%20don't%20affect%20them).%3C%2FP%3E%3C%2FLINGO-BODY%3E%3CLINGO-SUB%20id%3D%22lingo-sub-187878%22%20slang%3D%22en-US%22%3ERE%3A%20Office%20365%20numbers%20in%20Microsoft%20Q3%20FY18%20results%3C%2FLINGO-SUB%3E%3CLINGO-BODY%20id%3D%22lingo-body-187878%22%20slang%3D%22en-US%22%3EWith%20all%20those%20numbers%2C%20one%20would%20think%20they%20would%20be%20willing%20to%20spend%20some%20more%20%24%24%24%20on%20proper%20QA%20or%20on%20the%20support%20experience...%3C%2FLINGO-BODY%3E
Tony Redmond
MVP

Interesting points from yesterday's Microsoft FY18 Q3 earnings. Office 365 is now at 135 million monthly active users. The consumer number is now 30.6 million (folks who license Office 365 Home). On the commercial side, Microsoft reports annualized revenue for commercial cloud products at $24 billion. Goldman Sachs (at the earnings call) said that they estimate Azure to be $8 billion of that. Most analysts think Dynamics 365 is another billion, so that leaves around $15 billion ARR for Office 365. Dividing that by their monthly active users, it's annual RPU of $111, or around $9.25 monthly RPU. Given Microsoft's push to convince tenants to buy higher-priced E3 and E5 licenses and add-ons, there's plenty of room for growth in Office 365 revenues...

2 Replies
With all those numbers, one would think they would be willing to spend some more $$$ on proper QA or on the support experience...

Never confuse the pursuit of profit (which must be done to serve shareholder interests) with the pursuit of quality (which shareholders don't care much about as long as problems don't affect them).