Microsoft warned on Tuesday of a marked slowdown in its cloud computing business as large customers pause their spending in the face of a slowing economy, sending its shares down 7 per cent in after-market trading.
The cautious comments, which came during a call with Wall Street analysts, dented hopes that continued solid demand for cloud services would offset a slump in the PC market and help the world’s largest software company withstand wider pressures in the IT market.
Microsoft warned that revenue growth from Azure, the cloud computing platform that has become one of the main engines of its business, would slow by 5 percentage points this quarter, leaving aside the effect of currency movements. At 42 per cent, growth in the quarter to the end of September was already one point below analysts’ expectations, and four points lower than the preceding three months.