Robust Quarter for Wide-Moat Microsoft

Overall, Office 365 growth remains healthy as we saw 36% growth for the quarter on the commercial side. Previous Microsoft management had stated that at the end of 2017, 50% of Office users had transitioned from on-premises office to the cloud-based Office 365, with the goal to move toward two thirds by the end of fiscal 2019.

Microsoft Azure demonstrated growth of 76% year over year, which tracks exactly in line with our 76% expected growth for fiscal 2019. We have highlighted that Microsoft’s best advantage in the public cloud market is that it is not a direct competitor to its customers (unlike Amazon). We believe Satya Nadella has positioned Microsoft as an enterprise partner, and we think Microsoft’s Azure deal with Walmart (in the summer of 2018) underscores the firm’s ability to grow in the cloud.

LinkedIn demonstrated revenue growth of 33%, but what is more important in our mind is the firm’s 34% increase in sessions engagement, which equates to record engagement and job postings.

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