Security Dampens Microsoft Deals

In a conference call with analysts Thursday, Microsoft officials admitted that security concerns were weighing on its business, resulting in lost or delayed partnerships and sales.

Microsoft Corp. officials on Thursday admitted that security concerns had diverted the focus of its customers, sales staff, channel and partners away from closing deals, resulting in lost or delayed sales.

In an analyst and press teleconference to discuss the Redmond software makers first quarter financial results on Thursday, Microsofts chief financial officer John Connors outlined the largest risks to Microsofts business going forward.

"Our efforts to help our customers address the security challenges they face will absolutely continue. This is the number one priority at Microsoft.

"[CEO] Steve Ballmer recently outlined some of the new security initiatives we are taking, and our sales force and support organizations are focused on taking care of our customers. That could require in additional time being required to close deals or additional investments in education, business process and technology," he said.

/zimages/5/28571.gifMicrosoft CEO Steve Ballmer recently detailed the companys security initiatives. Click here for more information.

In addition, Microsoft did not count on any improvement in the economy for its second quarter forecast, though it did expect some modest increase in corporate spending in the second half of the year. So, if things were to deteriorate, its future financial results would be affected, Connors cautioned.

As regards Linux and other non-commercial software products, Connors would only say that these continued to be a threat to all commercial software companies.

Any strengthening of the dollar would also reduce the benefits from foreign exchange rates going forward, he said, adding that "litigation, generally, remains a risk. Finally, continuing to be successful requires great execution on all fronts.

"In closing I want to reiterate that we had a very solid quarter from a financial results perspective. We have great momentum in our consumer business and our forecast going forward reflects that optimism. We have a host of new products being launched this quarter that deliver real value to customers. The product roadmap over the next few years looks really promising as well," he said.

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