Myself back in April, following Microsoft’s Q3 earnings:
The Business Division is now by far the largest Microsoft division in terms of revenue. Meanwhile, Servers & Tools almost surpassed the Windows Division this past quarter. The last time that happened was the tail end of the Vista nightmare. It’s going to happen again. Microsoft’s two biggest businesses will be their enterprise businesses.
It happened this quarter. Servers & Tools shot right past Windows in revenue — by almost a billion dollars ($5.09B vs. $4.15B). Even if you take into account the $540M in deferred revenue that Microsoft included for upgrades, Servers still would have won. Office remained king with $6.29B.
Almost as amazing is that Servers & Tools almost surpassed Windows in profit as well. It was $2.39B for Windows versus $2.095B for Servers.
Obviously, part of this is the end of life of Windows 7 — Windows 8 will be out in the end of October. When it comes out, it will shoot far past Servers & Tools again, and probably even past Office. But for how long? In my mind, the trend is clear: Microsoft is quickly transforming into a full-on enterprise company.
The Online Services losses are getting ever-so-slightly better — when you don’t account for the insane $6.2B aQuantive write off — but they’re still awful ($472M loss versus $479M loss last quarter).
And the Entertainment and Devices division actually lost more money last quarter than the quarter before — which at the time was the first loss for the division since 2009.
For the fiscal year, Microsoft’s Online Services division lost a tad under $2B — or $8.12B if you include the aQuantive nightmare. Meanwhile, the Entertainment and Devices division made just $364M. A year ago, that division brought in $1.26B in profit.