Microsoft makes 85% profit on Windows

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Microsoft makes 85% profit on Windows

Mike Simons
Microsoft is making 85% operating profits on its Windows software, according to company documents filed with US authorities.

Its client division, which includes Windows operating systems products for desktop and notebook PCs, generated operating income of $2.48bn (£1.57bn) on revenue of $2.89bn, suggesting profit margins of 85%.

Server Platforms unit, which includes Windows server software sold to businesses, produced operating income of $519m (£328m) on revenue of $1.52bn.

The announcement, revealed in regulatory filings to the US Securities and Exchange Commission (SEC), will anger Microsoft rivals after the recent settlement of the company's long court battle after it was found guilty of illegally maintaining a monopoly in personal computer operating systems.

It will also surprise many corporate IT directors who reluctantly agreed to move Microsoft's controversial Software Assurance licensing scheme that was introduced earlier this year.

Whitehall's Office of Government Commerce, the Ministry of Defence, Department of Health and the Society of Information Management, the local authority IT directors' organisation, will also note the figures. All these organisations signed new licensing agreements with Microsoft during the past year.

Microsoft's Business Solutions division, which includes software from its acquisitions of Great Plains and Navision as well as its bCentral offerings, reported an operating loss of $68m (£43m) for the quarter, on turnover of $107m.

For its recently formed CE/Mobility division, Microsoft reported a loss from operations of $33m (£21m) on revenue of $17m. The MSN unit, which offers Internet access services, incurred a loss of $97m (£61m) from operations on revenue of $531m.

Microsoft's home and entertainment division, which includes its Xbox video game products, incurred operating losses of $177m (£112m) in its first quarter on $505m in revenue. Microsoft launched its Xbox in November 2001.

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