Azure is the only hyperscale cloud with a consistent computing stack that extends from the datacenter to the edge — and customers across every industry recognize this architectural advantage. Satya Nadella -- Chief Executive Officer Sure. This reflects an increase of about 5. Office 365 consumer subscribers hit 33. Just wanted to focus in on Windows.
But you guys have seen very stable growth. And we have the business model that aligns with them and their interest and the trust. Though impressive, that rate was the slowest in at least two years and represented a significant drop from the pace in the company's fourth quarter. LinkedIn revenue growth should be in the low 20s against a high prior-year comparable. Operating income increased 20% and 19% in constant currency.
Gross margin percentage decreased slightly as the growing mix of Azure IaaS and Pass revenue was partially offset by another quarter of material improvement in Azure gross margin. It was another strong quarter with double-digit top line and bottom line growth, the result of picking the right secular trends, accelerating innovation and most importantly, relentlessly focusing on our customers' success. This outperformance has not just been a recent phenomenon. This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. The only area that might decelerate a little bit appears to be the Intelligent Cloud segment where 17 percent I think at the midpoint it implies still amazing but down from 20-plus percent in the last three quarters. And then of course there is the other dimension, which is the levels of Office 365 all the way to E5 with significant value. Can you kind of maybe talk a little bit what you see around Cosmos, the whole database offering that you have and what you see in terms of client adoption there? When I think about the durable trends that I expect to see, it's been the hybrid value prop that we really just talked about on Mark's last question and then the premium mix.
Inventory levels were within the normal range. And they span, quite frankly, all the industries. Operator, we'll take next question please. Xbox software and services revenue increased 31% and 32% in constant currency, primarily driven by continued strength from a third-party title. They also sort of said things that will matter in this transition to the cloud will be consistency and productivity. So for sure, the sales cycles are different, but at the same time, you got to remember, at Microsoft, we do have a lot of different business that we do with the customers, which may include some things like refreshes of their on-premise infrastructure all the way to some very high-ambition digital transformation projects.
Operating expenses increased 1% and 2% in constant currency, and operating income increased 25% and 28% in constant currency. It is very true that at this point we are seeing these very large digital transformational efforts and projects that we are partnered with, and they span, quite frankly, all the industries. Now to the More Personal Computing segment. But we're not stopping there. Now back to total company results.
We do not endorse third-party information. And it enables extensibility across Microsoft 365 and Dynamics 365 as well as the leading third-party SaaS business applications. Walter Pritchard -- Citigroup -- Analyst Hi, thanks. Can you help us understand how the sort of capital intensity of some of these cloud businesses has been changing over time? We continue to innovate and expand our family of devices, setting the bar for the industry with newest Surface Pro, Surface Laptop and Surface Go. In the third quarter, Productivity and Business Processes revenue is projected to jump 11. Our decision to invest with significant ambition in high growth areas coupled with strong execution has resulted in material revenue growth at scale and a stronger position in many key markets.
The monthly returns are then compounded to arrive at the annual return. I'm energized about the tremendous opportunity in this space. In fact, if you take Walgreens Boots Alliance with Microsoft 365 as well as Azure. See, first of all, I'd say the opportunity for our shareholders when they think about Microsoft has never been better. Xbox software and services revenue increased 31% and 32% in constant currency, primarily driven by continued strength from a third-party title. So that's sort of perhaps characterizes for you what's new in terms of Microsoft's own growth in this space. Mike Spencer -- General Manager of Investor Relations and Assistant Treasurer Thanks, Brad.
Actual results could differ materially because of factors such as: · intense competition in all of our markets that may lead to lower revenue or operating margins; · increasing focus on cloud-based services presenting execution and competitive risks; · significant investments in new products and services that may not achieve expected returns; · acquisitions, joint ventures, and strategic alliances that may have an adverse effect on our business; · impairment of goodwill or amortizable intangible assets causing a significant charge to earnings; · legal changes, our evolving business model, piracy, and other factors may decrease the value of our intellectual property; · claims that Microsoft has infringed the intellectual property rights of others; · the possibility that we may fail to protect our source code; · cyberattacks and security vulnerabilities that could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position; · disclosure and misuse of personal data that could cause liability and harm to our reputation; · the possibility that we may not be able to protect information stored in our products and services from use by others; · abuse of our advertising or social platforms that may harm our reputation or user engagement; · excessive outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure; · government litigation and regulatory activity relating to competition rules that may limit how we design and market our products; · potential liability under trade protection, anti-corruption, and other laws resulting from our global operations; · laws and regulations relating to the handling of personal data that may impede the adoption of our services or result in increased costs, legal claims, fines, or reputational damage; · the dependence of our business on our ability to attract and retain talented employees; · claims against us that may result in adverse outcomes in legal disputes; · additional tax liabilities; · quality or supply problems; · exposure to increased economic and operational uncertainties from operating a global business, including the effects of foreign currency exchange; · catastrophic events or geo-political conditions that may disrupt our business; · adverse economic or market conditions that may harm our business; · changes in our sales organization that may impact revenues; · the development of the internet of things presenting security, privacy, and execution risks; · issues about the use of artificial intelligence in our offerings that may result in competitive harm, legal liability, or reputational harm; and · damage to our reputation or our brands that may harm our business and operating results. In fact, we are seeing very good adoption in scientific labs, in universities and some pharma companies and others who are looking at really building their quantum algorithmic promise long before the quantum computer is real so that they are ready to be able to take advantage of that computing resource. All this innovation is driving growth. All growth comparisons we make on the call today relate to the corresponding period of last year unless otherwise noted. We'll go to the next question please. So that's I think what is showing up at scale as competitive differentiation and that's what you see in our numbers, but most importantly, I think you see it in the customer momentum and what I believe is what is customer success.
Michael Spencer: Great, thanks, Walter. So it's that combination of things of going from knowledge workers to first line, going -- and the ability to reach all sizes of businesses is what's going to continue to help us, I think have overall seat growth or socket growth. Development teams at more than half of the Fortune 50 do their work in GitHub Enterprise. We introduced new brand and community building tools for marketeers with LinkedIn pages, making it easier for organizations of all sizes to foster strong connections with LinkedIn's 610 million members. We'll take the next question, please.