Tomahawk, WI 10/24/2014 (Basicsmedia) – Microsoft Corporation (NASDAQ:MSFT)’s cloud-based offerings performed better than expected in the first quarter allowing the company to beat Wall Street estimates in terms of revenue. During an interview on CNBC, ABR Investment Strategy CEO, Brad Gastwirth, argued that the company could perform even better in the long term with more attention and focus on the mobile strategy.
The surface tablet division was another top performer in the quarter for Microsoft Corporation (NASDAQ:MSFT) with revenues more than doubling to highs of $908 million up from $400 million as of last year same quarter.
“They really need to execute on the surface. There were rumors for some time now that they would actually maybe discontinue or stop it. They never made a lot of senses to me. I do believe it is important for them to have that product. It is also very important for them to convert tablets and get some office Suit or office 365 users on certain tablet devices,” said Mr. Gastwirth.
Doubling of sales on Azure cloud software and Web-based versions of Office programs allowed the company to post revenues of $23.2 billion for the first quarter against estimates of $22 billion. Improvements on the cloud came in the wake of increased competition in the space especially from Amazon.com, Inc. (NASDAQ:AMZN) and delayed entry into the space.
Gastwirth believes Microsoft Corporation (NASDAQ:MSFT) will continue to enjoy an advantage on the cloud with Azure cloud offerings based on the fact that many companies are running on Windows. Competition is expected to be the biggest headwind for Microsoft in the cloud space with the entry of more players as prices will continue to drop something that might affect profit margins.
“If you look at the environments a lot are running on Windows. Those companies it is a lot easier for them to use Azure you can actually have things on Premise in your corporation and then move it to the cloud quite seamlessly. So it makes it easier if you do have a Microsoft Corporation (NASDAQ:MSFT) shop to have Azure,” said Mr. Gastwirth.
Microsoft Corporation (NASDAQ:MSFT) will also be dropping the brand name Nokia Lumia that they bought with the acquisition of Nokia with the unveiling of a new smartphone Microsoft Lumia.