Feeds

Microsoft grows despite Windows Vista

Wow not now

Beginner's guide to SSL certificates

Not that you'd know it from Microsoft's results, or projected revenue, but the giant launched a brand-spanking new version of Windows this year.

Not only did Windows Vista - billed by Microsoft as its biggest operating system for 10 years - fail to distinguish Microsoft's latest fiscal year from previous, non-Windows-Vista years, but Microsoft also missed its own expectations by several million dollars.

The coming fiscal year looks little better.

Microsoft told Wall St it's reconciled to the fact the seven-year-old Windows XP will occupy more of the client revenue mix than Microsoft would have preferred, while revenue for the full year will grow less than the year just closed.

With the "wow" clearly failing to materialize in fiscal 2007, Microsoft was left to pronounce itself "broadly happy" - not blown away - with Windows Vista sales.

The sounds of chickens gently roosting could be heard on Thursday's call with Wall St analysts, coming - as the results did - after OEMs and component manufacturers have adjusted their own expectations having experienced lower-than-expected results as sales failed to live up to Microsoft's hype.

Microsoft reported revenue growth of 15.6 per cent to $51.1bn for the year to June 30, with growth of 12 per cent in net income to $14bn, and earnings per diluted share of $1.42 up - from $1.20. Annual growth is broadly in line with the non Windows Vista world of between eight and 14 per cent for the previous three years. Chief financial officer Chris Liddell said Windows Vista revenue recognition came in $20m to $30m lower than expected.

Fourth-quarter revenue grew 13.3 per cent to $13.37bn, translating to $3.03bn net income - growing 7.44 per cent - and growth in earnings of three cents to $0.31. The last three years' fourth quarters saw revenue increase between nine and 16 per cent.

The outlook for fiscal 2008 is not especially promising for Windows Vista either, as Microsoft made it clear consumers - not businesses - will drive client license growth. Microsoft expects revenue growth of between $56.8m and $57.8m, an increase on the last year's figures of between 11 and 13 per cent, a broad spectrum with a bottom end coming in significantly beneath the last year's figure.

And, while Microsoft is reducing projected sales of Windows XP - as you'd expect given Windows Vista is now the prime client operating system - the cut is not as deep as Microsoft wanted - from 85 to 78 per cent of business. Liddell called that a "low number, but a very high number overall from our perspective."

Meanwhile, consumers are expected to drive consumer sales rather than businesses. "The consumer segment is expected to grow faster than the business segment... we are relatively conservative on business growth overall. But we think it's appropriate to be conservative," Liddell said.

Rejecting the idea businesses are holding out for Windows Vista's first Service Pack (SP1), Liddell said: "[We] don't see it [SP1] as a massive driver of uptake in its own right. It's early days yet and we are broadly happy with how we are seeing Windows Vista adoption. We are always expecting that business uptake would be driven by their needs rather than the availability of Windows Vista per se."®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Microsoft on the Threshold of a new name for Windows next week
Rebranded OS reportedly set to be flung open by Redmond
Apple: SO sorry for the iOS 8.0.1 UPDATE BUNGLE HORROR
Apple kills 'upgrade'. Hey, Microsoft. You sure you want to be like these guys?
SMASH the Bash bug! Apple and Red Hat scramble for patch batches
'Applying multiple security updates is extremely difficult'
Business is back, baby! Hasta la VISTA, Win 8... Oh, yeah, Windows 9
Forget touchscreen millennials, Microsoft goes for mouse crowd
ARM gives Internet of Things a piece of its mind – the Cortex-M7
32-bit core packs some DSP for VIP IoT CPU LOL
Lotus Notes inventor Ozzie invents app to talk to people on your phone
Imagine that. Startup floats with voice collab app for Win iPhone
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.