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UK users: We pay for Microsoft's 85% profit on Windows

Corporate IT users in the UK have expressed frustration but little surprise at Microsoft's report that it is making 85% operating...

Corporate IT users in the UK have expressed frustration but little surprise at Microsoft's report that it is making 85% operating profits on its Windows software.

According to company documents filed with the US Securities and Exchange Commission, Microsoft's 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 for the quarter to the end of September.

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

David Roberts, chief executive of the corporate IT forum Tif, said: "Profits of this scale will not surprise corporate users of Microsoft products. We said that this year's licence changes would leave users facing up to100% increases in licensing costs."

Ben Booth, group IT director at market research company MORI, said most businesses had little choice but to pay the price Microsoft was asking "until it becomes commercially ruinous to continue.

"In business terms we have no alternative to Windows. I don't see open source as a serious contender."

But Booth added: "Microsoft licences are still competitive when compared with those of some other enterprise software vendors."

Roger Marshall, IT director of the Corporation of London, said the results showed users were paying the price for Microsoft's virtual monopoly of the desktop.

"Microsoft's effective monopoly allowed it to introduce the licence changes earlier this year, and most users will pay more, which is reflected in these profits.

"But monopolies don't last for ever. This will encourage the open-source movement to break into the market more effectively."

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