Microsoft Revenues: The Cloud Ain’t Killing Office & Windows

Some skeptics think cloud computing and open source are putting the squeeze on Microsoft’s conventional server and desktop businesses. But the software giant’s latest quarterly results suggest demand for Windows Server, Windows 7 and Microsoft Office 2010 remain incredibly robust. Skeptical? Check out these startling financial results.

For its fiscal first quarter, which ended in September, Microsoft’s net income rose a ginormous 51 percent to $5.4 billion and revenues jumped 25 percent to $16.2 billion, reports AP. The key conclusion: Sure, Microsoft continues to face tall challenges on the cloud computing and smart phone fronts but the company’s core business remains dominant. A few examples from AP:

• The Windows division’s revenue rose 66 percent to $4.8 billion.
• Office and other business software brought in $5.1 billion, a 14 percent jump.
• Server software sales rose 12 percent to $4 billion.

Emerging Market Challenges

Pretty freakin’ impressive — and downright dominant. Plus, Microsoft has been winning more and more cloud computing business — as some customers shift to Exchange Online, SharePoint Online and other applications hosted within Microsoft BPOS (Business Productivity Online Suite), soon to be called Office 365.

Still, there are channel challenges. During a recent partner conference hosted by N-able, attendees openly questioned Microsoft’s BPOS and Office 365 strategy. The cloud efforts allow Microsoft to manage all customer billing, which has triggered concern within portions of Microsoft’s channel. MSPs, in particular, are used to managing recurring revenue relationships directly with end-customers. Microsoft’s BPOS and forthcoming Office 365 offerings do not support such capabilities.

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