For the longest time, Windows was the most important part of Microsoft’s business. Turns out that’s changing.
As you can see in this chart, the Business Division, which is home to Office group, has blown past the Windows division as growing percentage of the company’s operating profit.
The two are symbiotic. The more people using Windows, the more people will use Office. However, the Windows business is in decline as mobile gadgets like the iPad and iPhone and Android phones become more and more popular.
Instead of denying what’s happening, Microsoft needs to profit from it by offering Office for all of these new, huge platforms.
(One thing to note: The chart looks like it’s seasonal, and that right before a new Windows release, it dips. It’s a little misleading though because Microsoft deferred revenue for a quarter, which accelerated the drop. And, yes, the two divisions have see sawed back and forth, but we believe a new era of computing is going to lead to Office taking over.)
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