At the end of its first fiscal quarter for 2016, Microsoft is maintaining its strength in cloud and demonstrating ongoing failure in the mobile space.
These were a couple of key takeaways from Redmond's Q1 earnings report for FY2016, released Oct. 22. The results reflected a new financial reporting structure that divides earnings into three segments focused on personal computing, productivity, and cloud.
First-quarter earnings, which demonstrate adjusted revenue of $21.7 billion, were largely driven by cloud. The Intelligent Cloud category, which includes products and services like Windows Server and Azure, increased 8% to hit $5.9 billion.
The success of cloud stands in stark contrast to the decline of Microsoft's More Personal Computing segment, which saw revenue topple 17% to $9.4 billion. The drop can be largely attributed to mobile; phone revenue tumbled 54% during the quarter.
[Browsing the Windows Store: Windows 10 apps for productivity.]
Microsoft is continuing to cut costs with a fresh wave of job cuts targeting 1,000 employees, reports The New York Times. These layoffs affect less than 1% of Microsoft's entire workforce and affect multiple business areas.
"The job reductions were spread across more than one business area and country and reflect adaptations to business needs," said a company spokesperson in a statement. This news follows a round of 7,800 layoffs in July, which primarily affected the mobile division.
Despite the ongoing mobile struggle, Microsoft is continuing development of Windows 10 Mobile. This week it released Build 10572 to Windows Insiders in the Fast ring, and it's available as an update from Windows Phone 8.1.
A few handy features in 10572 include the ability to send texts and receive missed call notifications with Cortana on the PC; use Skype within the universal apps for Messaging and Phone; save offline maps to an SD card, and access an improved UX for storage settings.
Mobile payments are on the horizon for Windows phones and tablets, as indicated in reports from Re/Code and The Verge. In a joint interview, VP Joe Belfiore stated Microsoft is doing "a bunch of work" in the mobile payments space and confirmed, "Windows is going to have a wallet concept."
Belfiore did not mention a timeline for the payment system, but did note Windows Hello, the facial recognition technology, is the type of authentication it would use to improve payments.
Microsoft is ramping up efforts to boost hardware sales, specifically among enterprise customers. The company announced two additions to its Surface Enterprise program shortly after the release of its Surface Pro 4 earlier this month.
The Surface Enterprise Initiative, first announced in September, will now include a trade-in program through which companies can exchange their old Surface devices for discounts on the Surface Pro 4.
A package called Microsoft Complete for Enterprise includes claim-pooling, next-day air for replacement devices, replacement claims for non-bootable devices, and access to an onboarding center. The bundle is intended to boost adoption of both Surface Pro 4 and Windows 10. It will be available early next year.
Those already using Windows 10 can expect the upcoming Threshold 2 update to roll out in early November, confirms The Verge. It includes a series of fixes, changes to the user interface, and a few smaller changes to its Edge browser. The upgrade will ship as a cumulative fall update, reports Paul Thurrott.