July 15, 2011
Microsoft Partner NetworkAt first glance, the Microsoft empire is under attack on all fronts. And some folks — including pundits on Wall Street and in Silicon Valley — have lost faith in CEO Steve Ballmer. But take a closer look at this week’s Microsoft Worldwide Partner Conference 2011 (WPC11) in Los Angeles, and you’ll discover Microsoft still builds new, innovative multi-billion-dollar businesses. Here’s the proof.
Sure, Microsoft has its share of challenges. The PC market is growing more slowly than expected. Apple and Google dominate the smart phone software market. Microsoft is nowhere to be seen in the tablet game. VMware still owns the virtualization market. And Microsoft — like every other software company — must reinvent itself for the cloud.
Let’s keep things in perspective. Microsoft is sitting on $48.72 billion in cash. Yes, that’s nearly $50 BILLION (sorry to shout…) according to Yahoo Finance. Windows 7 has been very well received. The massive Microsoft Office business still generates double-digit growth in many quarters. And Microsoft has quietly built a very large business around SharePoint, Lync and Dynamics CRM.
How large? It’s difficult for The VAR Guy to say for sure. But consider these anecdotal items… In terms of annual revenues:
SharePoint became a $2 billion product for Microsoft in 2010.
Lync is on track to become Microsoft’s next $1 billion product, according to multiple Microsoft executives at WPC11.
Microsoft’s Dynamics business has generated a compound annual growth rate of 20 percent over the past 10 years, according to Ballmer.
The real challenge: Microsoft is so freakin’ large. The company’s annual revenues grew to $62.4 billion in 2010, up from $44 billion in 2006. With such large numbers in play it’s sometimes easy to overlook hot growth areas — such as SharePoint, Lync and Dynamics. And the channel media — including The VAR Guy — sometimes spends too much time focused on sexy devices rather than business applications.
Revenues: On Fire?
Bottom line: If Microsoft is an empire set to burn to the ground, how come annual revenues grew nearly $20 billion in the past four years? Can anybody else name a software company that has built two applications from scratch — SharePoint and Lync — over the past decade, and transformed them into a combined market of roughly $3 billion or more?
Sure, Microsoft has missed the boat on a lengthy list of opportunities. Bill Gates way back in 1993 predicted the birth of the wallet PC — known today as Apple’s iPhone.
Still, plenty of channel opportunities await Microsoft’s partners — especially if you focus on business applications. Lync, by the way, stole the show at WPC11. Smart Microsoft partners are already plugging into it.
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