Microsoft's Surface and Windows sales are flagging badly (again)

Microsoft has just revealed its earnings for Q4 of fiscal 2023, and there are some highs and lows, with one of the latter again being sales of its Surface hardware and Windows OEM.

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If you recall, these areas were heavily down in the previous quarter, too, so this is a continued barrage of bad news for the hardware side of Microsoft.

Surface sales were down 20% year-on-year (a loss of $339 million), while sales of Windows to PC makers dropped by 12%.

In the previous Q3 earnings, Windows OEM revenue dropped by a rather eye-opening 28%, so the fall wasn't nearly as steep this time. But still, revenues are clearly on a downward trajectory.

Of course, this is no surprise, and comes as a result of the well-documented slump in PC sales which has been an ongoing situation for a while now (driven by the cost-of-living crisis, among other factors).

Elsewhere, Microsoft had more positive results, and predictably - once again - cloud revenue was a highlight across various facets. Office commercial products and cloud services revenue was up by 12%, and Office consumer products and cloud services was up 3%.

Intelligent Cloud revenue was up 15% and reached $24 billion in the quarter, helping in a big way to drive overall takings to $56.2 billion - which is actually up 8% on the same quarter last year.

So, despite the weaknesses on the hardware front, Microsoft still posted some robust gains here.

We get the feeling the quicker Microsoft can tie the Windows ecosystem more tightly into the cloud, the better for the company, and this is a clear aim as stated in the past.

As to how that shift will come, well, your guess is as good as ours, but there are already strong hints about Windows installations shifting from local to cloud installs eventually.