Vista sales help Microsoft rake in the cash… for now
By John Lister
Microsoft has recorded its highest ever annual revenues thanks in part to strong Vista sales – but financial analysts are cautious about the firm’s outlook.
Chief financial officer Chris Liddell reported 40 million Vista licences were sold between April and June this year, taking the total to 180 million in the first 18-months of Vista being on sale.
He said that was partly down to strong sales of PCs, the majority of which now come with Vista pre-installed, both to domestic corporate customers and to people in developing countries. The corporate sales are particularly important as its business users who’ve seemed most reluctant to upgrade.
These are the last sales figures which will cover Vista being on sale alongside XP. The big question now is whether Vista sales rise because it’s the only version of Windows on the shelf, or if potential customers really will decide to wait it out for Windows 7.
The firm also reported strong business for Microsoft Office and the range of server products. Overall, Microsoft’s profit for its financial year (which runs from July 2007-June 2008) was $17.7 billion, up from $14.1 billion in the previous year.
The biggest hit came in online business, which lost almost $500 million in three months. That will be particularly disappointing thanks to the close scrutiny which has followed the department since the Yahoo negotiations began. Liddell said this area (which is largely made up of online ad sales) was the most affected by the tough economy. He added “I can’t promise you that you’re going to see a massive turnaround in the short term.”
Despite the increased revenues, analysts warn Microsoft is paying too much attention to long-term investment at the expense of current growth. The firm’s stock actually fell when the results were announced, to the point that some tipsters even advised the stock may be underpriced and thus good value.
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July 19th, 2008
If you swapped out Microsoft and inserted Apple in the article, the financial press would be peeing themselves in rapture over the god that is Jobs.
The highest ever annual revenue for a company that has been basically a money printing press for the last decade gets a blog entry that is in the “don’t sweat much for a fat girl” category.
July 20th, 2008
Now, Ken, no-one wants to hear common sense.
As for Apple; who cares?
July 20th, 2008
@Ken, Mark,
Microsoft are really a lot like McDonalds, aren’t they? McDonalds, too, are a highly “successful” company - but their food is rubbish. Amusingly, McDonalds call their franchises “family restaurants”, which parallels Microsoft calling itself a “software vendor” when it is in fact a corrupt monopoly that has been convicted as such in a court of law.
As with McDonalds, the popularity of Microsoft has a lot more to do with the questionable discernment of its customers than it does with the quality of its products.
July 20th, 2008
Hugh,
Nice analogy-not. If Mcdonalds were 90% of the restaurants, supermarkets and grocery stores couldn’t operate without them, then your analogy would make sense.
If Microsoft shutdown tomorrow, life as you know it would be an instantly incredible pain in the ass. There is no operating system that could take up the slack. Not Linux and certainly not OSX. I’m a Linux user myself, but that doesn’t mean I’m blind to reality.
Apple would implode into a smoking ruin if it had to shoulder a small sliver of what MS does every day, Linux less so. Jobs refuses to play in the enterprise for a very good reason and it’s not because he hates cash flow. Any reasonable person can look at this Vista section will see an overwhelmingly negative avalanche of entries.
Look at the Mac and iPhone sections and it’s reversed. I’ve no great love for Microsoft and it’s practices, but when the biggest software company in the world, has it’s biggest annual revenue ever, even after all the well deserved Vista bashing and the article is slanted in a negative way, how can you miss an agenda?
Now back to Mac Daily News.
July 22nd, 2008
Ken,
Yes, I’ll admit that the analogy is not perfect, but then few analogies are
High revenues - even record revenues - don’t necessarily mean that a company is healthy; there are many other factors, for example profitability. Most importantly, one should consider a company’s conduct, and this is where Microsoft falls down - all the money in the world means nothing if a company does not conduct itself in an upright and honourable way. By that measure, Microsoft is a failure; so I think that agenda or not, their accounts are really a peripheral issue in any case.
July 22nd, 2008
Honorable is a matter of degrees. Show me a large company with no lawsuits filed and won against it.
Microsoft is indeed financially healthy by any standard you want to use. After the relentless pounding the press has given them over the last couple of years, the revenue last year would seem to point out how the reality is different from the bloggers perceptions. You want to keep a biased and emotional reaction based on second hand info from actions over a decade old feel free. Apple has settled 2 lawsuits and made restitution in the last year, can you name them?
July 25th, 2008
Ken,
It is true that large companies are a dodgy lot - I work for a large company myself, so I get to see this from the inside. As companies go, however, Microsoft represents the apotheosis of sleazy and the embodiment of dishonesty. They have truly made immoral (and amoral) corporate conduct into an art form. I follow what goes on, and I know that my view in that regard is neither “biased” nor “emotional”, and, furthermore, that it is not based on “second hand info” (I recently saw Bill Gates interviewed, and one particularly disingenuous answer was most revealing). Microsoft’s actions are symptomatic of their dysfunctional corporate culture; a culture that remains in place to this day. Microsoft have not changed their spots, and for any single lawsuit they have been guilty of thousands of transgressions, whether against the law, or morals, or simply common decency. Corporate culture flows from the man at the top: just look at the recently-departed Bill Gates - I mean, its just pathetic, and as much as I am angered by his actions and those of the company he founded, I actually feel sorry for the man for having demeaned himself so. I suspect that he was not the beneficiary of a decent upbringing, and that his infatuation with money and power mirror, to a large extent, the national obsession with things both vain and shallow.
As for Apple, I am vaguely aware that they have settled lawsuits, but I remain unaware of either the numbers or the details. If Apple ever start behaving as boorishly and arrogantly as Microsoft have done and continue to do, I will take more interest.
July 27th, 2008
Better start paying attention then. I work for a large company myself, and have been dealing with Microsoft for 25 years. I have been to Redmond a handful of times, and I am far from a cheerleader for them.
Jobs is as arrogant and as unlikable CEO as there is. He just happens to be a very talented one. Gates does more good with his wealth in one year than Jobs does in his life. In my 30 years in IT, I have known people who worked for both companies for extended periods, and Apple is far from it’s cultivated image in many of it’s operations. It’s just a media darling. Apple is Obama and Gates is McCain.
Here is what the greedy bastard is doing with his ill gotten loot.
http://en.wikipedia.org/wiki/Bill_and_Melinda_Gates_Foundation
In contrast:
http://www.wired.com/gadgets/mac/commentary/cultofmac/2006/01/70072
http://www.wired.com/gadgets/mac/commentary/cultofmac/2006/01/70072
http://www.tuaw.com/2006/08/23/apple-pays-100m-to-creative-in-patent-lawsuit-settlement/
If you lookup up vain and shallow the picture is more likely to be Jobs.
Save the pity for the one who needs it.
You are ill informed as your vaguely aware comment shows, unless you have a better handle on the facts. Microsoft is no worse than many companies it’s size, and Apple is no shining beacon of love and goodness, just like the only magic at Disney is how successful it is at making people think it is more than an amusement park.
July 28th, 2008
Hello Ken,
Fair enough, I’ll have a squiz at those links and let you know what I think (I may have to admit to willful ignorance on this one, which is a little worse than being ill-informed). I am an exponent of Linux rather than a fan of Macs, but my attitude to Apple has always been one of “my enemy’s enemy is my friend”. Perhaps I am playing Roosevelt to Apple’s Stalin in that regard (although I don’t think that Steve Jobs has designs on Eastern Europe).
July 29th, 2008
Hugh,
I’m typing this from a Mint install myself that dual boots OSX86. I’m really not a fan of Microsoft myself, but it’s my job to recommend the best solution for a problem or leverage business processes using I.T., and right now that usually is Microsoft.
When Apple trots out the clowns and ponies, everyone is set to party and have fun. When Microsoft does the same thing and people stare at the group looking for pony byproduct and think the clown is John Wayne Gacy.