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Windows remains in a commercial stalemate, with commercial sales rising thanks to Windows 10, but with a decline in consumer sales as individuals continue to avoid PCs, revealed the latest Microsoft earnings report released this week.
Specifically, Windows revenue grew 6% in the September quarter, reaching approximately US $ 4.6 billion, or about 42% of the total Personal Computing Plus group, the Windows-based accounting line. .
Microsoft has again attributed the growth to sales of commercial-grade licenses – Pro or Professional versions – to Original Manufacturers (OEMs), computer manufacturers who assemble and sell computers, and what it calls "Windows Commercial , Which is largely composed of: Volume Licensing Sales Enterprise Inventory Management Units and Education System Operating.
"We have seen healthy commercial deployments of Windows 10 as the OEM ecosystem continues to benefit from customer demand for modern, secure software and hardware," said Amy Hood, Microsoft's chief financial officer. of a call regarding profits with Wall Street.
"OEM Pro products grew by 8%, a few points less than the commercial PC market, thanks to a higher number of premium licenses." The business revenue of Windows commercial products and cloud services has increased by 12%. "
Windows Consumer Sales to Computer Manufacturers – Windows 10 Home, in other words – decreased by 5% for the September quarter compared to the same period last year due to continued pressure on the entry price category, "said Hood.
The terms used by Hood in the three categories – Professional OEM, Consumer OEM, and Windows Commercial – are now an integral part of Microsoft's earnings liturgy.
Take for example the language used in Microsoft's revenue over the past five quarters to describe consumer OEM sales, for example.
Credit: IDG Communications / Gregg Keizer The similarities between the explanatory text of the quarters, in particular the identical expression of "pressure in the entry level category" of the last three, illustrate the identical, old, identical nature of Windows on the consumer side .
During Microsoft's 2018 fiscal year, which ran from July 1, 2017 to June 30, 2018, Windows consumer OEM products decreased by 4% over the previous year.
Windows' commercial and Windows Commercial OEM revenue, however, increased 11% and 12% in fiscal 2018, Microsoft said. The increases recorded during the September quarter were 8% and 12%, respectively.
These income categories have also been described in a language that rarely deviates from a theme, which again shows how they have become the default growth areas of Windows.
Credit: IDG Communications / Gregg Keizer It's unclear how Microsoft allocates revenue generated by Windows-based SKUs with other products, such as Microsoft 365, a relatively new software. This subscription-based product combines Windows 10 Enterprise with Office 365.
Hood, of Microsoft, however, argued that Windows revenues, at least those from commercial customers, were rising as companies struggled to exit Windows 7 that was soon to retire and Windows 10.
"The end of support for (Windows 7) is about five quarters, so we will continue to expect a good signal and good demand in this Pro segment," Hood told financial analysts.
Free support for Windows 7 – which at this point is limited to security updates – will end on January 14, 2020. Microsoft will sell extended support for Windows 7 for a maximum of three months. years to customers who run the professional or business stock units.
Microsoft has not specified the impact of the end of the migration from Windows 7 to Windows 10 on revenue.
Although the firm Redmond, Wash. Ait repeatedly called Windows 10 "last" version, she never said what it meant money. However, the company has indicated, especially with subscriptions subscribed, that it did not intend to leave money on the table, even if there will never be an explicit transition from Windows X to Windows Y.
"The commercial proposal really concerns Microsoft 365," Hood said to the question of what she expects subscriptions in the future.
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