Microsoft Q3 2015 Earnings: Commercial cloud continues growth, Dynamics 'nearly $2B business'

Microsoft reported a 10% drop in its 2015 fiscal year third quarter earnings compared on a 6% increase in revenue to $21.7 billion. Both the revenue and the $0.61 earnings per share beat analyst expectations.

Commercial revenue, which includes Dynamics ERP and CRM solutions from MBS, grew 5% to $12.8 billion. And Microsoft highlighted strong enterprise sector growth for Dynamics ERP and CRM.

The Dynamics business "is now nearly a $2 billion business," CEO Satya Nadella said in an earnings call. "Dynamics CRM Online enterprise paid seats more than doubled year-over-year, and we more than doubled enterprise seats sold this quarter for ERP. We also announced a wave of innovation in Microsoft Dynamics CRM this quarter with new social, mobile and analytics capabilities for business process transformation, including seamless integration of Dynamics CRM with Office 365." 

Commercial cloud revenue grew 106% (111% in constant currency) "driven by Office 365, Azure and Dynamics CRM Online, and is now on an annualized revenue run rate of $6.3 billion," according to the earnings announcement. The company reports double digit growth in annuity revenue with cloud services growth and healthy renewals.

The "Commercial Other" segment saw 45% revenue growth to $2.8 billion, compared with a 3% decline in Commercial Licensing revenue to $10.0 billion.

Dynamics CRM customers now choose cloud deployment at a rate of more than 2 out of 3, Microsoft stated in its earnings slides. Commercial Other highlights also included a doubling in Azure compute usage and 70% growth in Enterprise Mobility customer to over 13,000.

"Customers continue to choose Microsoft to transform their business and as a result we saw incredible growth across our cloud services this quarter," said Satya Nadella, chief executive officer at Microsoft. "Next week ...