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Microsoft The Almighty Buck IT Hardware

Computer Demand Boosts MS Profits 181

Posted by Zonk
from the going-up dept.
elzurawka wrote to mention a BBC article discussing Microsoft's boost in profits as a result of an upswing in PC demand. From the article: "The company announced record revenue of $39.79bn for the fiscal year ending on 30 June, an 8% increase over the $36.84 billion reported last year. The main drivers of sales for Microsoft's Windows, Office and Server software products - PC makers and Asian component manufacturers - have reported healthy demand for PCs."
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Computer Demand Boosts MS Profits

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  • by Anonymous Coward
    They let the drivers of sales run in ring 0 which may perform better but exposes to kernel to crashes if the drivers are not thoroughly debugged.
  • by nospmiS remoH (714998) on Friday July 22, 2005 @12:57PM (#13136544) Journal
    In other news, the oil industry attributed increases in gas sales to an increase in automobile sales.
    • Parent shouldn't be modded offtopic! In that case, redundant would do. So I'd vote for insightful to compensate for the bad karma.
      • by j-tull (201124)
        I couldn't agree more!

        The /. crew is really taking the humor out of this board. Why be funny when, at best, it'll have no effect on your karma? At worst, humorless mods will kick your arse down to karma hell!

        (\me prepares to sink into the abyss yet again)
  • Meanwhile.. (Score:4, Interesting)

    by BlackCobra43 (596714) on Friday July 22, 2005 @12:58PM (#13136559)
    Microsoft stock falls 2.5% due to its "lackluster revenue outlooks" http://today.reuters.com/investing/MarketReportArt icle.aspx?type=usMktRpt [reuters.com]
    • Re:Meanwhile.. (Score:1, Insightful)

      by Anonymous Coward
      You got really scratch your head when a company literally makes billions and their stock declines while companies that lose money and have shaky business plans skyrocket.

      I made a small fortune in trading during the internet boom because of these idiots.
      • Re:Meanwhile.. (Score:2, Informative)

        by wwwojtek (246402)
        this is not "insightful" but actually quite silly - that a company makes billions tells me nothing about the direction of its stock price changes. The price should be high but it may be declining or increasing depending on changes in expectations of profits
      • Re:Meanwhile.. (Score:2, Informative)

        by coflow (519578)
        This really just shows that MS is no longer considered a "growth" company. The software they sell is mature and other than their groups that are currently losing money, there's not enough room to grow to support a P/E ratio of 100 or whatever it was 6 or 7 years ago. And even the divisions that are in "growth" categories look like small peanuts compared to the sheer size of their OS and office revenue.

        Once MS started paying a dividend, it was clear they themselves had come to grips with the fact that t
    • Yeah, sometimes you can only scratch your head ;-) Google is also down about 5% today (last I checked) after announcing they beat estimates. Sometimes "the street" is just in a funky mood ;-)
    • Burns: What!? Blast his hide to Hades! [thunder roars outside]
      And I was going to buy that ivory back-scratcher...
  • I suppose that the fact that I help as many people possible to not "buy" MS products has no effect on their sales. I guess I'm not trying hard enough.
    • Could be all the "sales" they get through OEM versions. "Somebody sold a computer? Well, there's another sale of Windows!"

      [insert typical gripe about uncompetitive MS behavior]

      (didn't RTFA; instinct tells me I'm wrong about these numbers including the OEM sales)
    • You're too late. Microsoft "sells" the OEM licensing in advance, so what you're doing doesn't have any effect; it's already bought and paid for. If you manage to haggle with the OEM and get a full refund for their OEM pricing, you're only screwing the OEM, not Microsoft.

    • Re:stock price.... (Score:5, Informative)

      by ProfaneBaby (821276) on Friday July 22, 2005 @01:08PM (#13136677)
      Stock price was inflated in the past few days on expectations of the earnings report. You'll notice that on Monday, the price closed around 25.6. Here at 10AMPST on Friday, the price is still around 25.74, which means it's still up from the beginning of the week.

      Wall Street can be a cruel mistress. Just because you make money doesn't mean your stock price goes up. You have to make enough money. It's about meeting and exceeding expectations, not just posting a profit.
      • Wall Street can be a cruel mistress. Just because you make money doesn't mean your stock price goes up.

        The entire problem with the stock market is just that. You are supposed to be buying stock for the *DIVIDENDS*. But P/E ratios are out of whack, so people are buying for speculation ... which is a bad idea to say the least.

        • In the tech market, P/E is not an entirely appropriate measure. What you're really hoping for is future earnings, and tech requires a high start-up cost but returns recurring profits. (Which is why companies so jealously guard their IP, to bring up another Slashdot flamewar.)

          The trick to getting rich on the Street is to see technologies that have a high P/E (or, more often, negative or infinite P/E because they have no earnings or losses) but will "win" eventually. A nose for good technology and a stron
      • "It's about meeting and exceeding expectations, not just posting a profit."

        Close, but not quite. It's about the investors next best alternative. If MSFT makes less money than Company B, then I buy Company B, all other things being the same.

        Your statement seems to imply that expectations drive everything. And they do -- but that's only because investors are constantly comparing their current investments with the next best alternative.

        You are dead on about one thing: Wall Street IS a cruel mistr
  • not even close! (Score:3, Interesting)

    by intmainvoid (109559) on Friday July 22, 2005 @12:59PM (#13136572)
    an 8% increase


    8 percent is nice and all, but when Apple's just announced a 75% increase in revenue [reuters.com] does it even rate a mention?

    • For MS it's 8% of a MUCH larger sales number.

      If I had the choice of having 8% of the MS net sales or 75% of the Apple net sales, I'd got for the 8%. It should be a MUCH larger number.
      • Re:not even close! (Score:3, Interesting)

        by Golias (176380)
        Well, a layman might still find those numbers extremely newsworthy, as it seems to indicate that Apple is growing at nine times the rate of Microsoft.

        But ignoring the statistical anomolies of comparing percentages instead of straight numbers, it doesn't make sense to compare the two companies.

        Microsoft makes an OS, but most of their money comes from being a software company. Yes, Windows is on almost every PC in the world (usually at an OEM price of less than $40 a pop), but MS-Office, which costs a lot
    • by ShaniaTwain (197446) on Friday July 22, 2005 @01:12PM (#13136726) Homepage
      Uhh.. Apple Revenue rose 75% to $3.52 billion from $2.01 billion, while MS rose 8% to $39.79 billion. That 8% increase alone is more that Apple's total Revenue, its all relative.

      One thing I'm sure we can agree on though: if they keep increasing at this rate it won't be long until they both have infinite income!
      • by Kiryat Malachi (177258) on Friday July 22, 2005 @01:26PM (#13136855) Journal
        An 8% increase yielding 39.79 billion implies that the revenue was 36.84 billion, meaning that 8% is 2.94 billion, meaning that the 8% increase is *not*, in fact, greater than Apple's total revenue of 3.52 billion.

        Brought to you by the Association For Numerical Fact Checks, a division of Mathematical Bitch Slaps Inc.
      • One thing I'm sure we can agree on though: if they keep increasing at this rate it won't be long until they both have infinite income!

        Eh? Exactly the opposite: if their relative growth percentage continues to be finite each year, their income will always be finite.

      • Uhh.. Apple Revenue rose 75% to $3.52 billion from $2.01 billion, while MS rose 8% to $39.79 billion. That 8% increase alone is more that Apple's total Revenue, its all relative.

        Apple's number is quarterly; Microsoft's is for the entire year. For the last twelve months, Apple's revenues were $11.1 billion [yahoo.com]. It's incredible that Apple is up to around 1/4-1/3 of MS's revenues after their recent growth spurt - quite respectable. Of course, they're still not anywhere close to as profitable, but no one else get

        • Well to be fair that's because Apple and MS have significantly different business models.

          MS work mostly with expensive one off costs that are then able to be copied at very little cost - ie software.

          Apple are a hardware company - per unit costs are always going to give them significantly lower profit margins (given a good enough scale for MS). Oh that make an OS, too.

          The differences aren't because MS are printing money, or because Apple are rubbish - they're just doing quite different things.
      • is more that Apple's total Revenue

        is more than Apple's total Revenue

    • Umm, I'd much rather recieve the 8% increase of MS revenue than the 75% increase in my pocketbook. Just because the % increase is higher doesn't mean the ACTUAL VALUE is higher
  • When you are talking that many billions, what is a few more or less.

    Obviously, I'd take a percentage point of that cash anyday and retire.
  • by pastpolls (585509) on Friday July 22, 2005 @12:59PM (#13136577)
    $39b for MS, as comprared to only $19b in gross collections for the NC Dept of Revenue for 2003-2004. I hope my state does not end up on the MS radar, it could get outsourced.
    • Well, would you rather be outsourced to M$, or India/China/Mexico?

      This is not a rhetorical question. I really want to know.
      • Well, I have not thought about it.

        China is communist, so I would not want to get outsourced to them because they would limit my internet access and my ability to play Battlefield 2 (just being honest).

        India is better that China, but the odds are I would end up in a one room shack that may or may not have running water, while my house gets bought by the few rich. There is not really a middle class in India, so I would assume I would go down rather than up. There are a lot of cows in NC, so there would be
    • Outsourcing (Score:4, Interesting)

      by vlad_petric (94134) on Friday July 22, 2005 @01:11PM (#13136717) Homepage
      M$ is one of the big companies that hasn't done major layoffs in the States. In fact, they were hiring when very few others were. You can't really accuse them of outsourcing. Sure, there's tons of reasons to hate 'em, but this one ain't it.
  • by Innova (1669) on Friday July 22, 2005 @01:01PM (#13136594) Homepage
    1. Design operating system with poor security.
    2. People throw away old computers with malware. [slashdot.org]
    3. Sell more licenses to operating system.
    4. Profit!!!
    • Better list:
      1. Design operating system with poor security.
      2. Lock all PC makers into shipping Windows.
      3. People throw away computers with malware and buy another one that still runs Windows.
      4. Profit!!!

      5. Rince and Repeat

      Just imagine if Apple did open up OSX to the PC side. How quickly this plan would put them into debt, but its the #2 that keeps them going.
  • Microsoft has already won. Now they make profits whenever any large computer manufacturer sells a computer. They could shut down now and pay their employees for the next few years off the profits from new computers alone.
    • Microsoft has already won. Now they make profits whenever any large computer manufacturer sells a computer. They could shut down now and pay their employees for the next few years off the profits from new computers alone.

      Well, you don't ever really "win" in business per se. You always still have to work to stay on top. But yeah, they have tons and tons of money... what's your point?
  • People are throwing out their old computers because of spyware infection, and buying new ones to avoid the hassle, according to the New York Times.

    Link: http://www.nytimes.com/2005/07/17/technology/17spy .html [nytimes.com]

    There is no doubt what those new machines come pre-installed with.

  • by Anonymous Coward
    Who needs hospitals and edumacation anyway.
    • True enough, but don't rag on MS for this rag on the US Tax code. For the last fiscal year (2004 since I haven't seen the 2005 income statement yet) MS paid about 10.94% of revenue in income tax. Compare this with everybody's favorite Google, which paid 7.87% of revenue. Its about 44.59% based on profit instead of revenue for MS and 39.23% for Google.

      So if you base it on profit instead of revenue it gets much more in the area of what I bloody have to pay. I wish I could pay taxes on my profit instead o
  • coincidence? (Score:3, Insightful)

    by kwoff (516741) on Friday July 22, 2005 @01:06PM (#13136656)
    Something else that might boost MS profits. Free advertisement as three MS-related stories were posted to slashdot within 4 hours.
  • Good to know we're on the right track.
    We just purchased 40 computers preloaded with XP home (apparently we couldn't get them without it), and then had to purchase 40 licenses (150 a pop) for XP Pro.
    Good work Microsoft, I feel so happy about this, and that my potential is your passion!

    Thank you, thank you so much.
  • The article points out that the market has given a "lukewarm response" as they dont think Microsoft's growth is sustainable.

    Brought to mind this link (which I originally saw on the front page of Joel on Software):

    http://blogs.apress.com/archives/000449.php?author =gary_cornell/ [apress.com]

  • Argh... (Score:2, Funny)

    by CarlinWithers (861335)
    Every time my inner geeks feels pleased with the idea that MS is starting to release it's control of the computer industry...

    I am then crushed by an article about MS doing really well.

    I sincerely hope that MS is in fact loosing it's dominance. Not because I hate Microsoft, but because the continued dominance of MS means yet more time we'll spend without significant innovation through competition.

  • Many people I know buy a new computer because of all the spyware and adware on their old one. (No, don't hit reply, yes they should be installing Linux on their old boxes instead.) I wonder what will happen to Microsoft's profits if they were ever to win the battle against malware?

    As an aside, I have never had trouble keeping my Windows XP box malware clean (I've been running XP since it came out). I run a spyware/anti-virus check every so often that never picks anything up except false positives. The
  • reported the following: [informationweek.com]

    Microsoft's top finance executives project stronger-than-average, double-digit revenue growth going forward, fueled by SQL and Visual Studio upgrades in its server and tools division. The Redmond, Wash., software giant also expects the launch of the Xbox 360 game console later this year to drive more than 50 percent revenue growth in its home and entertainment division.

    The MBS Unit is slowing down, but "[Microsoft] also anticipates rising revenue in its Windows client licensing

  • Besides special deals with schools, does anyone out there buy Windows in the cardboard box in the Software Isle? No?

    Then I think it's a reasonably good chance that this is one of those "special" moments. Let's all share it! Everyone gather 'round! Ready?!? Ok, let's say it all at once... 1... 2... 3...

    No shit!
  • by blakespot (213991) on Friday July 22, 2005 @01:18PM (#13136791) Homepage
    A team of famed mathematicians have make the breakthrough discovery that the integer 2, when added to another integer of the same value (2), results in a sum total of the integer 4. Early speculation that the resultant integer would be 5 or 3 has been shattered. Stay tuned for further details on this revelation.


    blakespot

  • They could so give me like 2 million and not even notice. What would it hurt?

    Do you think that somewhere in Redmond there is a room where Bill, Steve, et al go and have money fights with $1,000.00 dollar bills like Mr. Burns and Smithers used to?
  • Maybe if everyone didn't chuck their computer everytime it got spyware on it, the demand wouldn't be so high!

    / Just sayin'
    // Oops wrong site
  • 1) Build vunerable OS+apps
    2) Sell PC (MS makes money of Windows being pre-installed) PROFIT!
    3) Get machine infected with spyware+adware
    4) Piss customer off to the point of buying a new one
    5) Sell NEW PC to fix problem-PROFIT AGIAN!
    Return to step 3, repeat...become freaking rich.

    See...we missed the boat...MS has it down, and the average user doesn't even blame MS for having to buy their new PC.
  • In other news, Apple (and its fans) continue to insist there is no money in computer software, and the big $$$ are made in the computer hardware market.

    (note that all of Apple's recent growth has been in consumer electronics, not computers, before jerking knee).

  • Annual profits for MS Office increased from $10.653 billion to $11.013 billion, i.e. 3%. That's hardly a strong increase. (Moreover, almost all the increase is due to Japan. If Japan is excluded, revenue growth was virtually flat.)

    Profits on MS Office increased by 7%, but that is because R&D expenses are down. This means MS Office isn't going to get substantially improved--which we already pretty much knew.

    If MS Office is standing still, then it's going to be a lot easier for OpenOffice [openoffice.org] to catch

    • MS's growth rate can only go down from here. They had a good run, but the market has largely matured. Look around, a lot of businesses are quite happy with Windows 2000 (server and clients) and Office 2000. Those bits of code are 5 years old!

      Apparently, all people wanted was an operating system that didn't crash if you looked at it funny and some productivity apps to match.

      If I had the guts I would short the stock...
      • If I had the guts I would short the stock...

        Given the expense of shorting a stock, it's not generally a very good idea even if one know that said stock will drop over the long haul. Pity, that, 'cause I'd short the hell out of both GOOG and MSFT.

  • Is that before or after they cooked the books for Wall Street? For example, did they book the free software they gave to IBM as 'sales'? Manipulating the books is more the norm than the exception which is why I only invest in stock that pays dividends, since to do so you have to have real cash on hand.

    Which also is why President Jimmy Carter wanted to lift the dividend tax. He thought it might reduce the flim-flam with the corporate books.

    We'll check their cash position in a year or so and see if they are

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