Feeds

Microsoft: The MORE Surfaces it sells, the MORE money it loses

Win 8 slab sales eat their own revenues

Next gen security for virtualised datacentres

The more Surfaces slabs Microsoft sells, the more the Redmond giant has to shell out.

Microsoft Thursday trumpeted $494m in revenue made from sales of Surface during its third fiscal quarter.

But Microsoft also notched up $539m in costs associated with selling Surface, thereby cancelling out any profits and forcing it to post a loss of $45m for the three months to 31 March.

Microsoft reported $1.8bn in Surface revenue for the nine-month period with, guess what, costs outweighing revenue - $2.1bn. That meant a $300m loss for the period. Microsoft broke out the numbers in its 10-Q.

On the revenue/cost matter for Surface, Microsoft attributed growing revenue and increased costs to more sales of Surface.

Increase in cost of revenue was “due mainly to a higher number of units sold,” Microsoft said in its filing.

The message is clear: nearly a year-and-a-half into Surface, the more Windows 8 slabs Microsoft sells, the more it costs Microsoft.

The company is shy about saying how many Surfaces it has sold so hasn’t given unit shipments. That’s in contrast to its mouthiness on Xbox, in the same business unit as Surface – Devices and Consumer. Microsoft says it sold two million Xbox consoles for the third quarter and 10.6 million for the nine months.

The details emerged after Microsoft chief executive Satya Nadella was wooing Wall Street during the company’s earnings call, assuring them a new era has begun now that Steve Ballmer is no longer at the helm.

It was Nadella’s first quarterly conference call running the company – of which, until late last year, he had been a group president in the server and tools unit.

If he were to sum up the quarter in two words it would be “execution and transition.”

According to Nadella, “we are well on our way” to achieving his vision of going boldly into a “mobile-first, cloud-first world.”

“With every device launch, with every service launch we keep coming back and reinforcing that vision, because at the end of the day, it’s the purpose with which we approached the vision and the execution behind it which is what counts,” Nadella said during results call.

After years of complacency, absenteeism and poorly thought-through ideas, investors were anxious to know whether he has any big strategic reviews planned for the Microsoft business.

“One of the things that I feel as the leadership team we have really picked up the pace on [is] asking the hard questions – what is the believability of any of our plans – and pushing ourselves. Because at the end of the day, to me, I want to be very accountable to you all: to our customers, to our partners, [and] as a team by executing on our plans very well, because at the end of the day that’s what matters,” he said. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
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?