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” #Microsoft Gets Lift From Cloud Gains” –The Wall Street Journal, July 19, 2016 Tech investors should be able to glean two important takeaways from the WSJ headline above. The first, that Microsoft’s (NASDAQ:MSFT) stock popped in reaction to last week’s earnings announcement, can be quickly verified elsewhere. See for yourself.

However, the second apparent takeaway, about the current state of affairs within Microsoft’s cloud business, remains far less clear than that headline might lead you to think.

The tech giant uses an odd mix of reporting metrics to illustrate, or perhaps obfuscate, the progress of its cloud business — its most important growth initiative against rivals like #Amazon (NASDAQ:AMZN), #IBM (NYSE:IBM) and #Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL).

Microsoft’s confounding cloud metrics

On the surface, Microsoft’s cloud numbers give the appearance of impressive growth. In the conference call, Microsoft touted that its “commercial cloud” business achieved a $12 billion run rate, up nicely from $10 billion in its previous quarter. 

Microsoft went on to report that sales from its “intelligent cloud” segment — the actual cloud computing operating segment — for the quarter totaled $6.7 billion, up 7%.

Muddling matters for investors trying to figure out how Microsoft’s core #Azure infrastructure-as-a-service (IaaS) business — which competes with Amazon, IBM, and #Alphabet — is doing is that both the commercial cloud grouping and the intelligent cloud reporting segment contain other cloud-related pieces aside from Azure. Where exactly is the important Azure-only metric? Nowhere, unfortunately.

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