Microsoft Posts Monster Quarter While Vista Slips

By Nathan Statz

Month Date, 2007: Microsoft has been thumping its chest and sounding the trumpets after recording the fastest growing first quarter results since 1999, yet the software giant has experienced a decline in Vista sales.

Microsoft announced $US 13.6 Billion revenue for the first quarter of this financial year, which breaks down to $US 5.9 Billion net income and marks a 27% increase on the same period last year. Fueling this cash boost is explosive Xbox sales from the success of the space based shooter, Halo 3 and strong software sales through Microsoft’s partners and distributors.

“An interesting side issue here is that Microsoft says it has seen strong growth in client sales in BRIC countries (Brazil, Russia, India and China) which it attributes in part to lower levels of software piracy.” Said David Bradshaw, principal analyst at Ovum.

Besides the obvious boost this gives Microsoft, according to Bradshaw this is good news as almost all of Microsoft’s sales are indirect via partners, and it has by far the largest partner network of any software vendor.

“Whether you love or hate Microsoft, when it is doing well, most of the rest of the industry will also be doing well.” Said Bradshaw.

Despite still contributing a decent chunk towards Microsoft’s overall revenue, sales of its latest operating system Windows Vista have fallen from 10 million per quarter back in July to 9.3 million for this latest quarter.

“One market where Vista hasn't yet been a runaway success is the enterprise, where very few businesses have adopted Vista yet.” Said Bradshaw.

A large number of Vista sales are also being pushed out in pre-packaged bundle deals, where consumers aren’t electing to have Vista, it’s simply pre-installed on new computers. Whether or not these are remaining installed or the owners are reverting back to the more popular Windows XP remains to be seen.

Despite the fall, Vista isn’t showing real signs of becoming a dying operating system, as more fixes to very public problems materialise the move from XP to Vista is expected to become more widespread.

“There are now three certainties in life - death, taxes and an upgrade to your desktop operating system.” Said Bradshaw

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