Forget Xbox And Bing: Microsoft Is An Enterprise Company

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It really is time to stop worrying about Microsoft’s future with consumers.

So what if it doesn’t have a tablet yet or keeps burning $500 million a quarter on Bing?

Its earnings today showed what we all should know: Microsoft is an enterprise company.

Its enterprise business units are now bigger than (or darn close) to Windows.

And that’s not even fair because enterprise customers are the biggest buyers of Windows anyway.

Xbox sales are a tiny fraction and Bing is a joke.

There are a bunch of products that power Microsoft’s business that most people don’t even know about.

Look at its quarterly results today:

The Server & Tools Division (which is enterprise infrastructure software such as its database and its server management software) hit $4.57 billion in revenue and earned $1.74 billion. Windows was only $4.62 billion. And last quarter, Server & Tools revenue was actually BIGGER.

Bill Koefoed, the head of investor relations, told us, “SQL Server just crushed it.” Sales of the high end data centre version were up 30% over last year.

Bookings growth overall in the unit was up 20%. Koefoed suggested that 20% bookings growth from Microsoft’s huge base means that Windows Server is taking plenty of market share from virtualization leader VMWare.

The Business Division, (which is mostly MS Office sold to enterprises) hit $5.81 billion revenue and $3.77 billion in operating income). Sales of Dynamics CRM — Microsoft’s competitor to Salesforce — were up 30%. Sales of Lync — a corporate videoconferencing product — were up 35%.

Now compare this stuff to the beloved Xbox, which had an awful quarter with $1.62 billion in revenue and a $229 million operating loss. Ouch.

And the company’s consumer online losses are huge, but it’s a drop in the bucket compared with its real business.

As long as the enterprise loves Microsoft, the company has a bright future.

Don’t miss: Microsoft Windows Revenue Is On The Rise Again, Driving Solid Earnings Beat


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