News

Microsoft: Servers, XP Growing Revenues

• By Scott Bekker
• October 22, 2002

Microsoft Corp. used its recent financial earnings report to highlight momentum in its server and business products. Strong performers, according to the company, included SQL Server Enterprise Edition, Windows 2000 Server and Windows XP Professional.

Microsoft officials called attention to the business products during what amounted to a record quarter in the first quarter of Microsoft's fiscal 2003. During the three months ended Sept. 30, Microsoft raked in $7.75 billion in revenues and $4.05 billion in operating income. CFO John Connors and CEO Steve Ballmer downplayed the results, citing a continuing weak PC market and a positive effect on revenues from the Licensing 6.0 program.

"Revenues from Server Platforms grew 14 percent in the first quarter, driven by superior performances across a breadth of server products including the Windows 2000 Server and Microsoft SQL Server 2000 family of products," the company said in a statement.

Revenue gains came from a continuing trend for customers to buy increasing numbers of servers through multi-year contracts. Notable hefty purchases this quarter came from AFLAC, Bayer, ChevronTexaco and Unisys.

The Enterprise Edition of SQL Server saw 51 percent revenue growth over the quarter. The higher-end version of Microsoft's flagship databases costs $20,000 per processor, four times the $5,000-per-processor cost of vanilla SQL Server 2000.

Microsoft characterizes sales of Windows XP as "robust," with client operating system revenues growing 33 percent and Professional versions accounting for 63 percent of all OS sales. Microsoft claims 67 million copies of Windows XP have been sold by OEMs and retailers.

Meanwhile, Microsoft noted that demand for its forthcoming Windows .NET Server 2003 is brisk. More than 200,000 customers signed up through the Corporate Preview Program to get their hands on pre-release versions of the server operating system, which is expected to release to manufacturing in December.