Feeds

Microsoft grows despite Windows Vista

Wow not now

Top 5 reasons to deploy VMware with Tegile

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."®

Intelligent flash storage arrays

More from The Register

next story
Netscape Navigator - the browser that started it all - turns 20
It was 20 years ago today, Marc Andreeesen taught the band to play
Sway: Microsoft's new Office app doesn't have an Undo function
Content aggregation, meet the workplace ... oh
Sign off my IT project or I’ll PHONE your MUM
Honestly, it’s a piece of piss
Return of the Jedi – Apache reclaims web server crown
.london, .hamburg and .公司 - that's .com in Chinese - storm the web server charts
NetWare sales revive in China thanks to that man Snowden
If it ain't Microsoft, it's in fashion behind the Great Firewall
Chrome 38's new HTML tag support makes fatties FIT and SKINNIER
First browser to protect networks' bandwith using official spec
Admins! Never mind POODLE, there're NEW OpenSSL bugs to splat
Four new patches for open-source crypto libraries
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.