The PC Slump Finally Hits Microsoft, Though Cloud Cushions The Blow

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Windows sales dipped, but cloud revenue was through the proverbial roof.

Microsoft is starting to feel the effects of the shrinking PC marketplace. Windows revenue generated by sales to PC makers fell 7% in the July-September quarter. True, that's not as bad as Microsoft had expected; it had forecast a 15% decline. Still, Windows revenue rose 1% in the April-June quarter, despite sharp declines in the PC market.

Microsoft also reported that revenue from sales of its Surface tablets rose to $400 million, and said that unit sales have doubled since the April-June quarter.

Another peak in the hills and valleys of the  quarter's earnings announcement: Commercial cloud revenue, which includes Windows Azure and related services, skyrocketed 103%. Microsoft's renewed marketing push for Azure, which kicked off this summer, seems to be paying off.