Business Briefing

Microsoft Windows Sees Solid Gains Despite Naysayers

Microsoft Windows Sees Solid Gains Despite Naysayers
April 20, 2012 11:36AM

Bookmark and Share
"The predictions of the demise of popular powerful technology is often premature," said analyst Rob Enderle of the strong quarterly report for Microsoft Windows. "Right now iPads and smartphones are mostly accessories to personal computers. They are not replacements for them." Microsoft Windows sales rose 4 percent.

Neustar, Inc. (NYSE: NSR) is a trusted, neutral provider of real-time information and analysis to the Internet, telecommunications, information services, financial services, retail, media and advertising sectors. Neustar applies its advanced, secure technologies in location, identification, and evaluation to help its customers promote and protect their businesses. More information is available at www.neustar.biz.

Despite predictions of Windows' slow and painful death, Microsoft defied the analysts with its third-quarter earnings report by posting stronger-than-expected sales for the venerable operating system. Those sales helped push a 6 percent revenue increase in the quarter.

The Windows and Windows Live groups brought in $4.6 billion in the quarter. That is a 4 percent increase over the year-ago period and is just $112 million less than the fourth quarter of 2011. Fourth quarters are traditionally one of the strongest of the year due to PCs shipping during the holiday shopping season.

Double-Digit Operating-Income Growth

The Microsoft Business Division reported $5.81 billion in third-quarter revenue, a 9 percent increase from the year-ago period. Microsoft said that increase reflects the continued strength of Office 2010 with businesses and consumers. For its part, Microsoft Dynamics posted an 11 percent revenue increase from the prior year period, with Dynamics CRM revenue growing more than 30 percent.

The Online Services Division reported revenue of $707 million, a 6 percent increase from the prior year period. That reduced its operating loss by about $300 million.

The Server & Tools business posted $4.57 billion in third-quarter revenue, a 14 percent increase from the prior year period, driven by double-digit revenue growth in SQL Server and more than 20 percent growth in System Center revenue.

"We saw strong demand for our business desktop and infrastructure offerings," said Peter Klein, chief financial officer at Microsoft. "Solid revenue growth and continued cost discipline drove double-digit operating income growth."

Windows Still Breathing

We asked Rob Enderle, principal analyst at the Enderle Group and a long-time Microsoft observer, for this thoughts on the company's earnings at large, and particularly the performance of Windows. He told us he's not really surprised at the news that Windows is seeing gains.

"As we've certainly seen in previous generations, the predictions of the demise of popular powerful technology is often premature. Right now iPads and smartphones are mostly accessories to personal computers. They are not replacements for them," Enderle said.

"At some future point they might become replacements but they haven't crossed that particular chasm yet. The end result is that people continue to buy and as the economy improves sales of the dominant platform are going to improve with it."

Microsoft's Entertainment & Devices Division posted revenue of $1.62 billion, a decrease of 16 percent from the prior period due to a soft gaming console market. Xbox remained the top-selling console in the U.S. for the 15th consecutive month, and the company announced new television content partners and experiences for its 40 million Xbox LIVE members.

"I think Microsoft's earnings showcased a certain amount of weakness on the media side altogether in terms of technology take-up," Enderle said. "It's probably a blip as people wrap their heads around the next generation of media delivery tools. But it's something to keep your eye on."

Tell Us What You Think
Comment:

Name:

ob enderle:

Posted: 2012-04-23 @ 8:35am PT
Xbox remained the worst selling console in Japan for the 15th consecutive month...

Paul H:

Posted: 2012-04-22 @ 5:43am PT
Enderle is axiomatically wrong. He got SCOX totally wrong...his opinion is worthless.

And why does M$ never give figures for the failing phone business???



 Business Briefing
1. Investor Wants EMC To Spin Off VMware
2. Schools Buy Million Chromebooks in Q2
3. Will Time Warner Fend Off Murdoch?
4. NY Proposes Virtual Currency Rules
5. Visa Intros Online Payment Service




 Most Popular Articles
1. Experts Say Four Threats Put Internet Freedom at Risk
2. Review: Warming Up to Tablets with Keyboard Covers
3. Gartner Rates Security Solutions in Annual Magic Quadrant Report
4. Android SMS Worm Lets Bad Actors Cash In
5. Aerohive Helps Retailers Engage In-Store Customers

Have an informed opinion on this story?
Send a Letter to the Editor.
We want to know what you think.
Send us your Feedback.

 Related Topics  Latest News & Special Reports

  Lenovo Still in Small Windows Tablets
  How Chrome Eats Your Battery Life
  Cisco Woos More Devs with DevNet
  Investor Wants EMC To Spin Off VMware
  Schools Buy Million Chromebooks in Q2

 Technology Marketplace
Big Data
Unlock your enterprise data's potential. Learn how in the research report.
Are you getting everything you can out of your business data?
 
Business Intelligence
Get real-time, cloud-based information services with Neustar.
 
CIO Issues
Secure and retain skilled technology professionals. Learn how.
 
Cloud Computing
Are you getting everything you can out of your business data?
 
Data Storage
Unlock your enterprise data's potential. Learn how in the research report.
 
Enterprise Hardware
Protect your network with APC Smart-UPS battery backup
Cisco UCS Invicta Series flash memory systems
 
Enterprise I.T.
Register for an upcoming ISACA® certification exam today
Secure and retain skilled technology professionals. Learn how.
 
Enterprise Software
Unlock your enterprise data's potential. Learn how in the research report.
 
Hardware
Protect your network with APC Smart-UPS battery backup
Ferocious productivity. A fearless team of pros. Find Out More
Cisco UCS Invicta Series flash memory systems
 
Network Security
Protect your network with APC Smart-UPS battery backup
 
Small Business
Ferocious productivity. A fearless team of pros. Find Out More