MSFT · 10-K · 2026A · Full report

Distribution Channel Shift to Cloud

MICROSOFT CORP · 2026-07-29 · Importance 31 · Surprise 32

Microsoft's commercial business includes server products, cloud services, Microsoft 365 Commercial products and cloud services, LinkedIn, Dynamics, and enterprise and partner services. Server products revenue increased 1%, primarily from higher purchases of licenses running in multi-cloud environments, but this was partly offset by customers continuing to shift from on-premises products to cloud services. Cloud-based offerings increasingly recognize revenue over subscription or consumption periods rather than at the initial transaction.