CHART OF THE DAY: Where Microsoft's Profits Come From

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When Microsoft revealed its first ever computer, the Surface, CEO Steve Ballmer said, “Windows is the heart and soul of Microsoft from Windows PCs to Windows Servers to Windows Phones and Windows Azure.”

And while that’s certainly accurate, the Windows division was not the company’s heart and soul as far as profits go, last quarter. The company made twice as much money last quarter from the Business Division, which is home to Office. And Microsoft’s Server and Tools group had bigger profits than the Windows division.

The reason Windows profits were light is that Microsoft is in a transition from Windows 7 to Windows 8. Windows operating profit should pick back up once Windows 8 sales pick up this quarter into next year.

chart of the day, microsoft income by segment, oct 2012

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