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Peter Klein (right), Microsofts chief financial officer, stated, "We delivered strong financial results despite a mixed PC environment, which demonstrates the strength and breadth of our businesses. Consumers are purchasing Office 2010, Xbox and Kinect at tremendous rates, and businesses of all sizes are purchasing Microsoft platforms and applications."
Kevin Turner, Microsoft's chief operating officer, stated:
We delivered strong third quarter revenue from our business customers, driven by outstanding performance from Windows Server, SQL database, SharePoint, Exchange, Lync and increasingly our cloud services. Office had another huge quarter, again exceeding everyone's expectations, and the addition of Office 365 will make our cloud productivity solutions even more compelling. We continue to see strong adoption of our cloud-based services among the Fortune 500.
More than 50 million Windows 7 licenses sold during the quarter
Microsoft has five divisions: Windows & Windows Live, Business, Server and Tools, Online Services, and Entertainment and Devices (EDD). The last of these, EDD, used to be responsible not only for consumer products such as the Xbox 360 gaming console and Zune music player, but also for Microsoft's embedded OSes, including Windows Embedded Standard, Windows XP Embedded, Windows CE, and Windows Phone 7.
Last September, Microsoft said it was moving its Windows Embedded Business from EDD to the Server and Tools (STB) division. The reorg recognizes that embedded devices are increasingly becoming part of the enterprise, and also that their manufacturers generally produce other enterprise tools, the company said at the time.
The reorganization has not made it easier to discern just how much Microsoft's Windows Embedded operating systems contributed to the company's bottom line. (And, adding to the confusion, Windows Phone 7 remains part of EDD, even though Windows phones employ a version of Microsoft's Windows Embedded Compact operating system.)
Still, STB had a great quarter, with "strong performance across (its) portfolio," according to the software giant. The division was up in revenue 11 percent year over year, to a total of $4.1 billion, Microsoft said. Redmond's growth in server software sales outpaced growth in the server hardware market, with Windows Server, SQL Server, and System center all up by double digits, the company added.
As for EDD, Microsoft touted its alliance with Nokia regarding Windows Phone 7, but did not spell out how the nascent smartphone operating system might (or might not) have contributed to divisional revenues. But a great quarter was had by the Xbox 360 console (unit sales up 79 percent to 2.7 million for the quarter) and Kinect controller (2.4 million sold), according to the company. Reaching $1.94 billion, EDD's revenue was said to be up 60 percent year over year.
Microsoft suggested that the lagging revenue in the Windows and Windows Live division was due to an eight percent decline in the sale of consumer PCs, along with a 40 percent decline in netbooks. (Obviously, tablets are making their mark.) But the company added that business PC sales are up eight percent, and further suggested that approximately 50 million Windows 7 licenses had been sold during the quarter.
Microsoft Windows & Windows Live revenue for Q3 of FY2011
(Click to enlarge)
Source: Microsoft
Further information
To see Microsoft's own earnings release, including results for the company divisions not detailed above, a replay of an earnings call for analysts, plus the PowerPoint presentation for investors from which the above graphs were extracted, see the company's Investor Relations website.
Jonathan Angel can be followed at www.twitter.com/gadgetsense.
