Microsoft also highlighted that Office 365 Home, the subscription-based version of Office for consumers, ended the quarter with 4.4 million subscribers, almost 1 million more than in the previous quarter, and that Bing's search ad revenue went up 38 percent.
Despite that spike in search ads, total online ad revenue was up only 16 percent, crimped by a 24 percent drop in display ad sales.
Revenue for the traditional Office suite, sold via perpetual licenses, rose 15 percent, thanks primarily to sales in Japan. Combined with Office 365 Home sales, revenue for those consumer-focused versions of Office increased 28 percent. Microsoft cited the April 8 end-of-support deadline for Windows XP for spurring sales of Windows and Office.
The Hardware segment of the Devices and Consumer division had revenue growth of 41 percent, reaching $1.97 billion and driven by Xbox and Surface. Microsoft sold 2 million Xboxes during the quarter, and the Xbox business had revenue growth of 45 percent.
The Commercial division's revenue rose on a pro forma basis by 7 percent to $12.23 billion, and gross margin rose 6 percent to $9.91 billion. The division's performance was helped by a more-than-100-percent revenue increase from Office 365, the cloud and subscription suite of server and desktop productivity applications for businesses, and by a 150 percent hike in revenue from the Azure cloud platform services. Overall, the Commercial division's cloud revenue more than doubled.
Other highlights from the Commercial division include an 11 percent revenue increase in Windows volume licensing for business customers and "double-digit" revenue growth for on premises collaboration and communication server products Lync, SharePoint and Exchange, as well as for the SQL Server database and Windows Server OS. Taken together, on-premises server products had a revenue increase of 10 percent. Revenue from traditionally licensed Office was up 6 percent.
Microsoft estimates that about 90 percent of enterprise desktop PCs worldwide now run either Windows 7 or Windows 8.
Overall gross margin rose 3 percent during the quarter to $14.5 billion, while operating expense grew 2 percent to $7.5 billion. Microsoft expects to include in its next quarterly report the impact of its $7.2 billion acquisition of Nokia's devices business.
Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.