“This quarter, Microsoft saw businesses invest in the Windows platform with volume licensing revenue growing double-digits, and we estimate that the business PC market returned to modest growth,” management explained.įrom a stock market perspective, the real question facing Microsoft in the aftermath of their fourth quarter miss is whether Steve Ballmer and his team will shine in moving away from the PC, and the perpetual license model, and into the cloud and mobile, subscription based cloud solutions model. Microsoft actually saw a solid 14% revenue gain in their business division, with profit up 18%. The effect of the declining PC market may be overstated, though, particularly if one takes it as the cause of Friday’s massive declines. "The consumer PC market remains challenged and declined again this quarter," management said. In their fiscal fourth quarter, Microsoft reported a 6% expansion in Windows division revenues to $4.4 billion, yet operating profit halved to $1.1 billion.
TOMIGHTY PC WORLD SOFTWARE
Being the world’s largest software company, “over 80% of its revenue and nearly all of its profits continue to be derived by its ubiquitous Windows OS, its server business (Windows Server), and the business division (Office),” according to UBS.Īnd indeed that decline in the PC industry is hurting the company’s bottom line. Gartner data show PC shipments fell for the fifth consecutive quarter in Q2, this time tanking 10.9% to 76 million units.
The sell off was sparked by fears over the declines of the PC market. Shares in the maker of Windows had rallied nearly 30% this year, leaving both the broader stock market and the technology sector in the dust. Microsoft’s decline is both a consequence of the changing dynamics of the tech world and the incredible surge in its stock price this year.
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