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Business Software Drives Microsoft's Gains

Microsoft's core business software drove the financial gains the company reported in its fourth quarter, according to the company's financial statements.

Microsoft's overall revenues were up by 11 percent in its fourth quarter ended June 30, 2003, compared to its fourth quarter for 2002. The 2002 fourth quarter total was a little over $8 billion, while the company's revenues for Q4 2002 were $7.25 billion, Microsoft reported last week.

Some 82 percent of the $812 million in new revenues came from the company's server software ($283 million more), Windows XP Professional ($200 million more) and Information Worker (read Office, with $182 million more).

Revenues for non-Professional client versions of Windows actually fell by about $100 million compared to the year-ago quarter when Windows XP Home Edition was much newer. While Microsoft's Business Solutions software gained about $93 million in revenues in a year-over-year quarterly comparison, most of that gain is accounted for through Microsoft's acquisition of Navision.

One non-business software area where Microsoft saw a major increase in revenues was with its MSN business unit, which brought in $112 million more this quarter than the comparable quarter for 2002. While no business unit brought in less revenue than the year-ago quarter, the mobile and embedded devices unit brought in just $8 million more and the home and entertainment unit, which includes Xbox, brought in $35 million more.

According to Microsoft CFO John Connors, Windows server revenues were up 24 percent in the quarter, which included the April 24 launch of Windows Server 2003. SQL Server revenues were up by 34 percent, Connors said. Broken down, the server software and CALs were up 21 percent to $251 million, and consulting and premier product support services were up 14 percent to $33 million. But revenue from developer tools, training, certification and Microsoft Press, all of which are included in the server platforms category, were down by $1 million.

For the full year ended June 30, 2003, Microsoft had revenues of $32 billion, a $3.8 billion increase over the year ended June 30, 2002. The client, server platforms and information worker segments each brought in about $1 billion in additional revenue in 2003.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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