THIS INFORMATION IS OUTDATED. Click here to see the updated 2012 report.
Since my previous article on this topic has received a lot of attention, I figured I should update the numbers for 2010.
Before I post these numbers (which are publicly available via Microsoft’s 10K filing), let me clearly state that I do not compile this information in order to advocate a pro- or anti-Microsoft agenda. My primary purpose in compiling this information is to help individuals discuss Microsoft with some level of objectivity.
So without further ado, here’s a simplified version of “where does Microsoft make its money (2010).”
Total Revenue and Operating Income (June 2009 – 2010)
Total Revenue: $62,484,000,000
Operating Income: $24,098,000,000
For those who don’t know, Operating Income = Operating Revenue – Operating Expenses. In other words, “Operating Income” is the profit made from normal business operations. (A more formal definition is available from Investopedia: “Operating income would not include items such as investments in other firms, taxes or interest expenses. In addition, nonrecurring items such as cash paid for a lawsuit settlement are often not included. Operating income is required to calculate operating margin, which describes a company’s operating efficiency.”)
Revenue and Operating Income by Division (June 2009 – 2010)
Microsoft’s products are divided into five divisions: Windows & Windows Live (formerly “Client”), Server and Tools, Online Services, Microsoft Business, and Entertainment and Devices. The types of products and services provided by each segment are summarized below:
Windows and Windows Live – Windows operating system: Windows 7, including Home Basic, Home Premium, Professional, Ultimate, Enterprise, and Starter Edition; Windows Vista, including Home Basic, Home Premium, Ultimate, Business, Enterprise and Starter Edition; and Windows XP Home. Windows Live suite of applications and web services.
Server and Tools – Windows Server operating system; Windows Azure; Microsoft SQL Server; SQL Azure; Visual Studio; Silverlight; System Center products; Biz Talk Server; Microsoft Consulting Services; Premier product support services; and other products and services.
Online Services Business – Bing; Microsoft adCenter; MSN; and Atlas online tools for advertisers and publishers.
Microsoft Business Division – Microsoft Office; Microsoft SharePoint; and Microsoft Dynamics ERP and CRM, as well as Microsoft Office Web Apps, which are the online companions to Microsoft Word, Excel, PowerPoint and OneNote.
Entertainment and Devices Division – Xbox 360 console and games; Xbox LIVE; Windows Phone; Windows Embedded device operating system; Zune; Mediaroom; and numerous consumer software and hardware products (such as Mac Office, mice, and keyboards); and Windows Automotive.
Microsoft’s previous fiscal year (June 2009-2010) was a particularly interesting one, with major headlines including the Windows 7 launch, Office 2010 launch, a redesigned XBox 360, Windows Phone 7, a new search and advertising agreement with Yahoo!, and the first full year of Bing-branded services. Some of these announcements came late in the fiscal year, which can indicate significant development cost without corresponding sales (keep that in mind).
The 2009-2010 Revenue and Operating Income for each division, in USD, is as follows:
Windows and Windows Live
Operating Income: $12,977,000,000
Server and Tools (Windows Server, Windows Azure, Visual Studio, Silverlight)
Operating Income: $5,491,000,000
Online Services (Bing, MSN, Hotmail)
Operating income: $-2,355,000,000
Business (Office, SharePoint, Dynamics ERP/CRM)
Operating income: $11,776,000,000
Entertainment and Devices (XBox 360/LIVE, Zune, Windows Phone, hardware)
Operating income: $679,000,000