Commercial Other revenue increased $355 million or 28%, due to higher Cloud Services revenue and Enterprise Services revenue. Cloud Services revenue grew $261 million or 103%, due mainly to higher revenue from Commercial O365. Enterprise Services revenue grew $93 million or 9%, due to growth in both Premier product support and consulting services.
Commercial Other gross margin increased $170 million or 162%, due to higher revenue, offset in part by a $185 million or 16% increase in cost of revenue. The increase in cost of revenue was due mainly to higher datacenter expenses, reflecting investment in online operations infrastructure, and increased headcount-related expenses due to higher headcount.