Microsoft sees fall in revenue and profit but cloud and Office grow

Microsoft saw revenue and profit fall as it reported its latest round of financial results, but the company's much-heralded cloud and Office software businesses continue to grow.

When taking over as head of the company in 2014, CEO Satya Nadella stated that the future of the company lay in its productivity businesses - its online cloud services offering virtual space to users, as well as Microsoft Office, the long-standing suite of productivity apps that includes Word and Excel.

These latest results showed the company's cloud business grew 7% and the number of subscribers to Office 365, the online version of the software, rose to more than 22 million, a sign that Mr Nadella's strategy was taking effect.

However, the company's overall revenue fell by 6% on the same period last year to 20.5 billion dollars (£14.3bn).

"Organisations using digital technology to transform and drive new growth increasingly choose Microsoft as a partner," Mr Nadella said of the results.

"As these organisations turn to us, we're seeing momentum across Microsoft's cloud services and with Windows 10."

There was some good news for the technology firm's hardware business too, as revenue for its Surface range of hybrid laptops and tablets grew by 61% on the same period in 2015, which the company said was due to the launch of the Surface Pro 4 tablet and Surface Book laptop.

The number of subscribers to Xbox Live, the games console's online service also increased, with active user numbers up 26% on last year to 46 million players, the company said.

However, Microsoft's smartphone business continued to decline drastically, falling 46% on the same period in 2015, with the company still yet to release a flagship Windows Phone since the launch of Windows 10 last summer.