New | Microsoft changing its business, but is it doing so fast enough?

Microsoft is changing its business. The question has been whether it’s changing fast enough.

The tech giant showed some progress Thursday, reporting better-than-expected quarterly earnings and more growth in its relatively new cloud computing segment. CEO Satya Nadella has been investing in new services and redesigning Microsoft’s most popular programmes for smartphones and other mobile gadgets.

But a continuing slump in the PC industry has caused Microsoft’s stock to tumble in recent months, marking the end of a honeymoon period in which shares rose steadily after Nadella took the reins in February 2014. Microsoft’s latest report shows another decline in profit and in revenue from the company’s flagship Windows software for personal computers.

Wall Street analysts say 2015 is the year when Nadella needs to show his strategy is making a difference.

“He needs to not just talk the talk, but walk the walk,” said FBR Capital Markets analyst Daniel Ives, who’s been a fan of Nadella’s moves to overhaul a company best known for its personal computer software.

Microsoft’s financial results underscore the importance of those efforts. Revenue from cloud computing has grown rapidly, as more businesses are paying to use software housed in Microsoft’s data centres. The Redmond, Washington-based company says it’s on track to log more than US$6 billion in cloud sales in 2015.