Where Data Tells the Story
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Microsoft’s service and other revenue skyrocketed from $24 billion in 2016 to $229 billion in the twelve months ending Q3 2025—an 860% increase, representing a 12.5% compound annual growth rate (CAGR). Over the same period, product revenue declined 4%, slipping from $67 billion to $65 billion. This dramatic shift highlights Microsoft’s successful transition from a traditional software vendor to a cloud- and subscription-driven enterprise anchored by Azure, Office 365, and other recurring service platforms.