Posted on 10/26/2007 7:23:43 PM PDT by jdm
Microsoft Relevant Products/Services posted revenue of $13.76 billion for the company's fiscal first quarter -- a 27 percent increase over the year-earlier period. Net income amounted to $4.29 billion or 45 cents per share.
"The first quarter represented an outstanding start of the fiscal year, with every part of the company performing above expectations," said Microsoft CFO Chris Liddell. "I was particularly happy that we increased revenue while meeting operating expense guidance."
Microsoft's Client, Business Division, and Server and Tools units grew combined revenue in excess of 20 percent, with demand for Vista, Office 2007, Windows Server, and SQL Relevant Products/Services Server all leading the way. "The performance was across all divisions, customer segments, channels and geographies," Liddell noted.
Higher Octane Vista Mix
The company's Business Division saw revenue climb by 20 percent to reach $4.11 billion, even as revenue at the company's Server and Tools unit rose by 16 percent to $2.5 billion. Microsoft also saw sales soar in its Entertainment and Devices division, driven by the uptake of 1.8 million Xbox 360 consoles as well as by soaring demand for the new Halo 3 video game. The $1.93 billion in revenue racked up by the division represented a 91 percent increase over the prior-year period.
But Microsoft executives were clearly the most pleased with the performance of the company's Client unit, which has shipped 88 million copies of Vista to date -- almost double the number of XP copies that had shipped in the equivalent period of XP's product cycle.
"Customer demand for Windows Vista this quarter continued to build with double-digit growth in multiyear agreements by businesses and with the vast majority of consumers purchasing premium editions," said Kevin Johnson, the president of the company's Platform and Services Division. "Since we launched Vista, the revenue growth has been in excess of 20 percent for three quarters in a row," Liddell added.
Liddell also noted that the sales ratio of high-end versus low-end editions of both Vista and XP -- which Microsoft calls the "premium mix" -- stood at 75 percent in the quarter compared with 59 percent in the year-earlier period.
Business Growth Ahead
The volume portion of Microsoft's sale of its client annuity agreement, which includes an upgrade path to Vista for enterprise, rose by 27 percent. Liddell said this is probably the best indicator Microsoft has for gauging the intention of businesses to adopt Vista.
"Certainly some businesses will be waiting for Vista SP1 to roll out, but in terms of multiyear agreements, their intention to roll out is signaled by that," he added. "We still think that the consumer side will grow faster than business, but overall it was a very good story on the client side."
Liddell also said that Microsoft had enjoyed 20 percent growth in the so-called BRIC countries of Brasil, Russia, India, and China. "I think that the benefit we saw on the business aspect was most particular in some of the emerging markets, and that helped us with the legalization and piracy aspect of our growth," Liddell said. "Enlarging our geographic presence has positioned us to benefit from the continued worldwide economic expansion."
Doesn’t this have more to do with MS’s crackdown on illegal copies of Windows, where users are forced to buy a legal version, or things like their printers quit working, and they get these nasty messages whenever accessing the internet???
Correction. I should have said ‘something’ to do with, instead of ‘more’ to do with.
Microsoft is doing just fine. Longhorn is in the pipe. Visual Studio 2008 is coming along nicely. Their workflow engine is very well done. .NET 3.0 is extremely strong. They have some of best people on the planet working to exploit multicore and network processing.
I love Macs, but they just don't have the commercial properties of Microsoft.
Went to Best Buy yesterday and poked around with the desktops for an hour. I discovered that Vista makes some sense with 3gb ram, above average video card and a good dual core processor. I like the Aero effects and the overall look of Vista
I am slowly buying the parts I need to make (as in screwdriver) a Vista computer
That would be your best bet with Vista, just make sure there are Vista compatible drivers for the parts you choose. Early this year I built a dual core system with a few gigs of RAM and tried Vista on it. Vista ran great and was surprisingly stable, but I just didn't like it because it was a hassle to use. The UAC "security feature" was just intolerable for me. I know it can be disabled, but I understand that the OS heavily relies on it for security. I also didn't like 'cartoony' look of the UI, of course I dislike a GUI anyway.
I run XP so it looks like Windows98. Cartoony aspects of XP get turned off. But I like the Aero look from what I see so far. Really XP is good enough for me. I will build a Vista-Aero computer for the fun of it plus so I can help people who have Vista questions and problems
E2140 is what I’ll get and overclock it. I have bought everything but processor and motherboard for my Vista machine. And if I don’t like Vista I’ll slap XP on it
That's what I ended up doing. I lasted four days on Vista before upgrading back to XP. lol I was going to put Linux on my new machine but there wasn't yet(and still aren't) any Linux drivers for it.
I frequently see language in software that talks about shipped not sold, especially when a company uses indirect sales, they make money on a lot of products they didn’t technically “sell” but they did ship it. Especially in this SOX world everybody needs to make sure their language in any document investors might read is accurate.
If only I had a nickel for every time I heard that. Of course, Microsoft isn't without its impressive bits. Photosynth takes turning pictures into walk-through panoramas to a whole new level. It is revolutionary in that market.
On another level, I just can't trust the competency of a company that would make the absurd design decisions related to Vista's network slowdown in the presence of media playback.
Vista is the platform for some incredible stuff.
Yep, all of the above media will be wrapped in Vista's ingrained DRM and give people headaches for years.
He turned off Vista’s User Access Control - which means he now has no more security than XP SP 2 shipped with.
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