A key concern amongst investors remains the potential for a more disruptive cloud transition, where growth in Azure increasingly cannibalizes the higher margin on-premises Server & Tools business. With commercial bookings growth accelerating to +19% cc YoY growth and server products revenues growing 5% cc, it's evident Microsoft is driving more value from customers through the cloud transition. Furthermore, Intelligent Cloud gross margin dollars grew 11% cc YoY in the quarter, as Azure gross margins continue to trend higher.
