Microsoft's earnings call dominated its week, with news of strong Kinect sales. Microsoft also fought TiVo and a Salesforce.com hire.
week was all about the numbers, courtesy of its Jan. 27 quarterly earnings
For the three
months ended Dec. 31, Microsoft chalked up $19.95 billion in revenue and $6.63
billion in net income. It sold some 8 million Kinect units in the hands-free
controller's first 60 days of release, giving the company a solid win for the
holiday season. The company also announced during the earnings call-following
up on reports from earlier in the week-that approximately 2 million Windows
Phone 7 units had been sold by manufacturers to retailers, although the actual
number in consumers' hands is in question.
Office 2010, the latest edition of Microsoft's productivity software, are
apparently outpacing Office 2007 sales by 50 percent over an equivalent period.
In addition, some 300 million Windows 7 licenses have sold since its October
2009 release, and CFO Peter Klein claimed during the earnings call that some 90
percent of enterprises worldwide have started their migration to the operating
Some of those
numbers weren't quite so positive. Microsoft's Online Services Division took a
$543 million hit in the quarter, a significant tumble even from the $463
million lost during the same quarter in 2009. That brings Microsoft's total
division losses for the six months ending Dec. 31 to $1.1 billion. The company
is obviously willing to burn that sort of cash to keep Bing viable against
Google in the search game, and executives on the earnings call cautioned that
certain online initiatives, including Bing powering Yahoo's backend search
results, have yet to yield their full potential in revenues.
has yet to see substantial revenues from its cloud initiatives. "We obviously
haven't given any guidance on the revenue of that and how fast it's going to
ramp up," Klein said on the call. "It's one of those things where it's going to
happen, and the exact sort of speed of the ramp is uncertain. I do believe that
once it starts to accelerate, it's going to accelerate pretty fast."
cloud projects include Azure and the upcoming Office 365, which offers
businesses a platform for staying up-to-date with the latest versions of
Microsoft Office, SharePoint Online, Exchange Online and Lync Online. In a
competitive frame, many of those cloud offerings compete with similar products
from Google and Salesforce.com.
In yet another
sign of just how seriously Microsoft takes its cloud aspirations, the company
moved this week to block a former executive from joining Salesforce.com.
Matthew Miszewski, formerly general manager of worldwide government at
, had been hired by the cloud-computing company as senior
vice president of its global public sector.
violation of his employment agreement with Microsoft, Miszewski has accepted
employment with Microsoft's direct competitor Salesforce.com," reads a Jan. 26 complaint Microsoft filed with the Superior
Court of the State of Washington for King County
, "in a position
that targets precisely the same market segment-government and public-sector
customers-that was Miszewski's area of responsibility while employed at
(Also in the
lawsuit category, Microsoft filed a complaint with the U.S. International Trade
Commission against TiVo, asking for an import ban on the latter's digital video
recorders. In the complaint, Microsoft accuses the company of infringing on four patents
Even as it
gears up to battle for cloud-space dominance, Microsoft also seems to be
prepping to release the Internet Explorer 9 Release Candidate. "The software
giant is expected to unveil the Release Candidate version of Internet Explorer
9 at an event in San Francisco on February 10," read a Jan. 28 posting on the blog WinRumors
which also claimed the software "will include a number of new enhancements from
the previous public beta build."
As this week's
quarterly earnings call demonstrated, Microsoft continues to perform strongly
in its traditional product lines such as Windows 7 and Office 2010, in addition
to its Kinect success. Making its presence felt in the more volatile mobile and
online sectors, though, has become a source of concern and focus.