Microsoft grows despite Vista

Wow not now

Not that you'd know it from Microsoft's results, or projected revenue, but the giant launched a brand-spanking new version of Windows this year.

Not only did Windows Vista - billed by Microsoft as its biggest operating system for 10 years - fail to distinguish Microsoft's latest fiscal year from previous, non-Windows-Vista years, but Microsoft also missed its own expectations by several million dollars.

The coming fiscal year looks little better.

Microsoft told Wall St it's reconciled to the fact the seven-year-old Windows XP will occupy more of the client revenue mix than Microsoft would have preferred, while revenue for the full year will grow less than the year just closed.

With the "wow" clearly failing to materialize in fiscal 2007, Microsoft was left to pronounce itself "broadly happy" - not blown away - with Windows Vista sales.

The sounds of chickens gently roosting could be heard on Thursday's call with Wall St analysts, coming - as the results did - after OEMs and component manufacturers have adjusted their own expectations having experienced lower-than-expected results as sales failed to live up to Microsoft's hype.

Microsoft reported revenue growth of 15.6 per cent to $51.1bn for the year to June 30, with growth of 12 per cent in net income to $14bn, and earnings per diluted share of $1.42 up - from $1.20. Annual growth is broadly in line with the non Windows Vista world of between eight and 14 per cent for the previous three years. Chief financial officer Chris Liddell said Windows Vista revenue recognition came in $20m to $30m lower than expected.

The outlook for fiscal 2008 is not especially promising for Windows Vista either, as Microsoft made it clear consumers - not businesses - will drive client license growth. Microsoft expects revenue growth of between $56.8m and $57.8m, an increase on the last year's figures of between 11 and 13 per cent, a broad spectrum with a bottom end coming in significantly beneath the last year's figure.

http://www.theregister.com/2007/07/20/microsoft_quarter_vista/