At a glance
- CFO Amy Hood said the longer useful life reflected Microsoft's "operating history and expected use of these assets," Data Center Dynamics reported.
- For underwriting data center real estate, the comparison is now 25 years, not 15.
- Azure reported its first standalone revenue: $33.2 billion, up 48 percent year on year and equal to 36 percent of company revenue.
Microsoft raised the expected useful life of its data centers and office buildings to 25 years from 15, a change disclosed on the company's earnings call for the quarter ended September.
CFO Amy Hood said the longer useful life reflected Microsoft's "operating history and expected use of these assets," Data Center Dynamics reported. Uptime Institute research published in 2024 put typical data center operation at 10 to 15 years, with a mean lifespan of 11.3 years. Spreading the same construction cost across 25 years rather than 15 lowers the annual depreciation charge and, all else equal, lifts reported operating income in the near term.
For underwriting data center real estate, the comparison is now 25 years, not 15. Microsoft can extend the book life of assets it owns and operates; a fund buying a stabilized campus or powered shell still must defend a residual value. The 11.3-year mean Uptime measured in 2024 is the figure an appraiser is likely to start from.
Azure reported its first standalone revenue: $33.2 billion, up 48 percent year on year and equal to 36 percent of company revenue. The Agents and Infra division that houses Azure and Microsoft's AI tools reported $76.8 billion, up 25 percent.
Capex was $45.2 billion, below the $50.7 billion expected. Data Center Dynamics attributed the gap partly to delayed deals with neoclouds.
Microsoft brought 24 new data centers online across five continents during the quarter. CEO Satya Nadella said the company continues "to get more from the infrastructure we already have by optimizing across the data center design, silicon systems, software, and models." He said Copilot workload throughput rose more than 50 percent quarter over quarter and dock-to-live times for new GB300 systems in the largest regions fell about 20 percent quarter over quarter.
Microsoft is thought to have access to roughly 12GW of data center capacity, according to Data Center Dynamics. The company has also been contracting renewable supply for the fleet, most recently two Japan solar PPAs with Macquarie's Blueleaf, as Private Infrastructure Daily previously reported.
Microsoft stretched data center life to 25 years, far beyond the 11.3-year norm
Expected operating life of data center assets, years
- Microsoft, new estimate25 years
- Microsoft, prior estimate15 years
- Uptime Institute mean, 202411.3 years
Show as table
| Item | Value (years) |
|---|---|
| Microsoft, new estimate | 25 years |
| Microsoft, prior estimate | 15 years |
| Uptime Institute mean, 2024 | 11.3 years |
Reported by the Data centers & fiber desk from Data Center Dynamics. Published . Corrections