Microsoft is striving to become a cloud computing company, and its efforts seem to be paying off.

The company reported an eight percent increase in the revenue from its Intelligent Cloud segment, compared to its flat overall revenue for the quarter ending in September. Microsoft earned $6.4 billion from its Intelligent Cloud segment while its overall revenue stood at $20.5 billion.

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Microsoft also announced encouraging results from its other cloud-based segments such as Azure. The segment showed an 116 percent increase in its year-over-year revenue. Microsoft's Productivity and Business Process segment also registered an impressive at revenue at $6.7 billion, showing a six percent growth. While Microsoft does not provide financial details of its cloud segment, it has revealed that the company earns about 49 percent of its profit margin from its cloud platform.

Microsoft divides its business into three reporting segments. These segments are Productivity and Business Processes, Intelligent Cloud, and Personal Computing. Intelligent Cloud segment includes Windows Server, Azure, and Visual Studio, among others. The Intelligent Cloud segment clocked an eight percent growth in its revenue to touch $6.4 billion. The company said that the main draw of Microsoft services is that it goes beyond merely providing cloud infrastructure service.

However, the company is still facing challenges when it comes to mobile phone business. The segment showed a 72 percent decline. The company expects the segment to fall further in the coming quarter. It expects the sale of its feature phone business to be completed by the second quarter of FY17.

Microsoft announced its gaming revenue at $1.89 billion, down five percent. The decline is due to the slowdown in Xbox console sales. The company's revenue also suffered from price cuts on the console.