Sales in Microsoft's PC arm, which includes its Windows software fell five percent to $11.8 billion - this is about the same as the percentage of falling PC sales.

But still Vole saw a 3.6 percent rise in fiscal second-quarter profit mostly thanks to its cloud based operations. But while the cloud was Vole’s saviour it seems that Microsoft had to slash margins for its flagship cloud platform Azure by a percentage.

Chris Suh, head of Microsoft's investor relations said that gross margins for Microsoft's so-called "commercial cloud" business, which includes Azure and versions of its online Office 365 product sold to businesses, were 48 percent.

That is down from last quarter's 49 percent. The figure is important because it is a sign of the actual profit made of Microsoft's cloud products, which the company does not publish.

Suh admitted that Vole was no longer at rival Amazon’s margin because the online book seller was much bigger and had the benefit of scale. However she said that Vole ‘s margins were about the same as Amazon when it was closer to Microsoft’s size.

Nadella said the company thinks of its cloud offerings as comprehensive lineup of both software and infrastructure, as it did with its historical business as a combination of products with different margins, like Office and Windows Server.

Revenue from Microsoft's 'Intelligent Cloud' business, which includes Azure, along with other data centre software, rose 8.0 percent to $6.9 billion in the quarter. That beat analysts' average estimate of $6.73 billion. Microsoft's estimates for next quarter were $6.45 billion to $6.65 billion.

Azure's revenue grew 94 percent year over year which is the lowest growth rate since Microsoft began disclosing the number in 2015, and down from 121 percent the previous quarter.

Sales of Office 365 to businesses rose 49 percent, down from 54 percent in the previous quarter.

The company's net income rose to $5.20 billion in the quarter ended December 31, from $5.02 billion a year earlier. Its adjusted revenue was $25.838 billion, ahead of analysts' average estimate of $25.298 billion.