Microsoft announced Tuesday that it earned a net income of $21.9 billion on revenues of $62 billion in the quarter ending December 31, 2023. Those figures are up 33 percent and 18 percent, respectively, year-over-year (YOY)

Intelligent Cloud: Azure, AI

• Microsoft's biggest business unit delivered $25.9 billion in revenue, up 20 percent YOY and driven primarily by its Azure cloud platform
• Azure revenues were up 30 percent in the quarter, 6 points of which Microsoft attributed to "AI services"

Productivity and Business Processes: Microsoft 365

• $19.2 billion in revenues, with growth of 13 percent YOY
• Office Commercial revenues were up 15 percent

More Personal Computing: Xbox, Windows

• Revenues of $16.9 billion, up 19 percent YOY
• Gaming revenues surged 49 percent (44 points from Activision Blizzard)
• Xbox hardware revenues inched up by 3 percent
• Windows revenues from PC makers grew 11 percent in the quarter

Windows

• Canary: Voice Clarity comes to more PCs, and Microsoft previews new/old Windows Setup first-run experience
• Dev: Minor bug fixes only
• Beta: Snap Layout suggestions, new settings in Widgets, and you can now revert to stable (!!)

Microsoft 365

• Teams goes down for the count

AI

• Microsoft adds deepfake guardrails to Designer AI. So, this wasn't there before now?
• FTC is investigating Microsoft/OpenAI and other Big Tech AI partnerships

Xbox

• Microsoft can finally bring Xbox Cloud Gaming to the iPhone (and Fortnite is coming back to the iPhone in the EU)
• 1900 layoffs at Activision Blizzard, Zenimax, and Xbox

Tips and Picks

• Tip of the week: Upgrade to passkeys
• App pick of the week: Insync
• RunAs Radio this week: Software Licensing with Mary Jo Foley
• Brown liquor pick of the week: Dailuaine 16

Hosts: Leo Laporte, Paul Thurrott, and Richard Campbell

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