Bekker's Blog

Blog archive

Microsoft Reports Growth in MCS

If you think of Microsoft partners as organizations that consult on and implement Microsoft technology solutions, one of the largest organizations in the channel is Microsoft's own Enterprise Services arm, which includes Microsoft Consulting Services (MCS).

Microsoft generally keeps communications vague about Enterprise Services and MCS, due to the sensitive nature of its occasionally testy relationship with enterprise and federal government partners. Still, the company releases some broad outlines of the group's performance in every financial report, and last week's release was no exception.

"Enterprise Services revenue grew 5 percent, and 3 percent in constant currency, as growth in Premier Support Services and Microsoft Consulting Services was partially offset by declines in custom support agreements for Windows Server 2003," said Microsoft CFO Amy Hood during the call with financial analysts.

Details in Microsoft's 10-Q filing (.DOC) with the U.S. Securities and Exchange Commission indicated that the 5 percent amounted to $64 million, suggesting overall Enterprise Services revenues for the quarter were in the neighborhood of $1.3 billion.

What that tells us about actual MCS revenue is a little, but not a lot. We can infer that MCS revenues may be increasing at better than 5 percent to offset the custom support contracts. Meanwhile, it's hard to know how big a chunk of Enterprise Services revenues comes from MCS. Premier Support Services is a big business, and even a declining custom support agreement business is accounting for part of the revenue.

Looking ahead to Q3, Hood told analysts to expect a similar revenue growth rate for all of Enterprise Services in Q3 compared to Q2, with growth in Premier Support offsetting the Windows 2003 custom support agreement decline, and no mention of MCS as a major factor either up or down.

Microsoft's services are generally focused at the highest end, with the company claiming 75 percent of its engagements are with the Fortune 1000, and Microsoft often acts as a prime contractor, pulling partners into deals in various roles.

What are you seeing out there? Is MCS being more or less aggressive in competing with you for customer deals than you've seen in the past? Let me know at sbekker@rcpmag.com.

Posted by Scott Bekker on February 08, 2018 at 9:22 AM


Featured

  • The 2020 Microsoft Product Roadmap

    From the next major update to Windows 10 to the next generations of .NET and PowerShell, here's what's on tap from Microsoft this year.

  • 2020 Microsoft Conference Calendar: For Partners, IT Pros and Developers

    Here's your guide to all the IT training sessions, partner meet-ups and annual Microsoft conferences you won't want to miss. (Now updated with COVID-19-related event changes.)

  • Curvey Stone Steps Graphic

    Microsoft Makes Run at 5G, Edge Computing with Azure Edge Zones

    Microsoft is promising to enable new edge computing scenarios for partners and developers with Azure Edge Zones, which became available as a preview this week.

  • Microsoft's Entire 2020 Event Lineup Going 'Digital-First'

    In response to concerns about the ongoing coronavirus (COVID-19) pandemic, Microsoft is transitioning all of its big conferences in 2020 to be online only.

RCP Update

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.