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Jul 20 2007   11:37AM GMT

Microsoft financial results show Office cloud success, potential of other strategies



Posted by: badarrow
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Barbara Darrow
Microsoft
News

After all the sturm und drang around Microsoft’s games and “software plus services” game plans at and after the Microsoft Worldwide Partners Conference last week, it still should come as no surprise to active Microsoft solution providers that the engine of the company’s growth and profit continues to be boring old Office and Windows.

All those billions cover a multitude of miscues. The $1-billion-plus-change charge Microsoft had to take on Xbox warranties for example.

The Microsoft Business Division (MDB) — home of Office — logged a hefty $3 billion in profit for the quarter ending June 30. That’s up from $2.5 billion for the year-ago period.

The client business, earned $2.8 billion for the period, up from $2.5 billion for the comparable quarter last year. Yikes.

Meanwhile, Entertainment and Devices, (games) lost $1.2 billion this quarter compared to a $423 million loss last year. Overall, Microsoft raked in nearly $4 billion in profits, compared to nearly $3.9 billion for the year-ago period.

One attendee of the recent Microsoft partner conference engaging in the “who will be the next CEO” game said that if people thought games-guy Robbie Bach could be a dark horse candidate, that billion-dollar write down might fix that, fast.

Meanwhile, speaking of Microsoft Business Division: That group now encompasses all the ERP and CRM products; so, with business apps all wrapped up with Office revenues, it’s gonna be tough to gauge the health of the ERP and CRM business going forward.

Also does anyone find it weird that Bob Muglia’s Server & Tools group is now in MBD? One former Microsoft exec says taking that from Kevin Johnson (president of the platforms and services division and former head of marketing and sales) frees the latter up to concentrate on executing the company’s search and advertising effort and make sure its purchase of online advertising agency aQuantive (another anti-Google tactic) bears fruit.

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