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Microsoft Posts Record Earnings
sriram_2001 writes "Microsoft has just had a record quarter where their profits have doubled from the previous quarter. Total sales are at $10 billion, exceeding both internal and external expectations. Microsoft has attributed the rise in earnings to increased server sales (where *nix-based systems are supposed to be doing well) and more XBox units being sold. For a company that most Slashdotters would say is on the decline, Microsoft sure has weird financial results!" To put it in perspective, Microsoft's income is about the same as New York State receives in taxes - below California, and well above the other 48 states.
For a company that most Slashdotters would say is on the decline, Microsoft sure has weird financial results!
/. community?
g )
What is with the crop of stories that attempt to goad the entire
First, I thought: "Was that parting shot really necessary?" Then I realised that the article submitter is a Microsoft fanboy
Troll.
P.S. If you want the editor to screen stories more carefully, please send your concerns to (daddypants)_AT_*NO_SPAM_*(slashdot)_tee_hee_.(or
about two minutes ago I got sent this
Screw you all! I'm off to the pub
But how do we know that this growth isn't just because we happen to be in a fairly prosperous time for the tech-market in general right now? These rates could take a turn for the worse in the next couple years. So this could all just be circumstantial.
What I'd like to see is a comparison of growth rates of major software companies. Even if Microsoft still comes out on top, at least the comparison would be relative to _something_.
IBM, for example, makes big bucks too, but they also facilitate cash flow because most of their revenue goes to vendors, contrators, etc.
Microsoft is a money sink. Society sinks money in it, but hardly any comes back out (that's why Gates can spend so much on charity, in case you were wondering..)
the day after MacWorld, Apple reported its best quarter ever.s .html/
http://www.apple.com/pr/library/2005/jan/12result
I once attended a technical presentation about OSS, and I recalled some interesting facts.
Even during the most difficult of economic times, Microsoft has made billions.
Even when tech companies are in a slump, and businesses fold left and right, MS continues to rake in the dough.
So where does this money come from?
"IT CAME FROM YOU!" said the presenter.
Yes, while your companies are struggling to make a penny or two, MS just leeches off of you with their Windows licenses and forced upgrades. Face it, you get little in return for every new version of Windows you buy. Win2K->WinXP was just a hideous facelift.
Yet people still pay through the nose for Windows. It's inexplicable.
"Backups are for wimps. Real men upload their data to an FTP site and have everyone else mirror it." -- Linus Torvalds
"We have to discern the enthusiasm over 7 percent growth versus 30 to 50 percent growth we had seen 10 years ago..."
You have to keep in mind that it really will get harder and harder to maintain high growth rates. Multi-million dollar markets are not big enough for M$ now. They will only enter larger (billion dollar) markets. Furthermore, without market and sales growth, their stock price simply cannot grow at a high rate. Think "mature company" not "young, fast, growing company" from here going forward.
How to Download YouTube Videos
This isn't another episode of funny accounting is it?
It is of sorts. Microsoft has so much cash in various accounts is is commonly known in the past that not was all accounted for as to make their profits more reasonable. With a 80-90% markup in North American markets does not hurt either.
Y2K was 4-5 years ago, and alot of the sales are upgrades from NT to W2000 or W2003. 1999 was a bubble sales year and after 4-5 years write down many companies will upgrade servers. Sales for this type are Y2K cyclical and will not last.
And if you don't plow the income into R&D to fix issues of security, usability and reliability then it is like milking a cow without feeding it.
Novell had such a bubble near it's end at the top as did Digital and IBM before them. History is just repeating itself.
...that 1.5 billion of the increase in profit is due to a 1.5 billion reduction in R&D. Wonder what long term effect halving the R&D budget will have on future MS technology?
Well, only some of that can be attributed to Halo 2.
It's probably sold close to 7 million copies now. Add in an average of $10 worth of accessories to each sale (some people buy a new controller or two, but most buy nothing else).
So, you have (Halo 2 ($50) + $10 accessories) * 7 million = $420 million, roughly $300 million of which is profit. Plus all the new Xbox live account, which is probably pulling in a couple million in profit per month.
Nice bump from Halo 2, but it's clearly not enough to double their profit from the previous quarter.
Also, sales of new xboxes don't count, since this is profit, not revenue.
bah, it always sucks to do percentage comparisions of a small company against a large company.
A 1 man outfit hiring 2 others is a 300% growth.
Some of us don't have the budget to buy a redundant server box - I make do with a warm-swap external hard drive that can boot a workstation from the server image in case of b0rk. Cheap, less effective, but good enough. People who think everyone has enough money to to implement the ideal solution deserve what they get. Which is a begging letter from my department ;-)
No, he's probably still grinning after yesterday, when Tony Blair lent him political legitimacy by sitting down to a world economic conference with him :/
I used to temp for MS from 1998-2000, I was a bus rider and the traffic was so bad from Redmond to Seattle that some employees would cruise the bus stops asking for a third person to qualify for the car pool lane. If you didn't take the HOV lane, it would add 45 to 90 minutes to your commute.
One time I got a ride with someone from accounting. The conversation must have been started about how they posted record profits that day and he was all giddy about it. He went on about how they withhold money back in some financial quarts in order to show off record results in another. I'm sure this has become familiar with many people over the 90s that once or twice a year MS would post record profits. The sole purpose would be to drive up the price of the stock. I laughed and asked him if it were legal, he said that not only was it legal, but very common in the industry. What he was doing wasn't any different from what other companies did during the dot com explosion.
I haven't temped there in a while, im not sure how things are in the labs or meeting rooms. Everyone benefits from a higher stock price, but im thinking this may be to keep their talent from jumping ship. Back in the mid to late 90s, a program manger or developer could be expected to work there for 7 years, then cash in all their stock options and retire at the ripe old age of 30. Its obviously not like that now because the stock price is lower and has been like that for several years. Investors really aren't that worried about the stock price, they are in it for the long term investment. But not the workers! Oh no, they want to work that 7 years and get the hell out of dodge and its the stock options that really keeps a MS employee working there. I've heard it from a few developers that if it wasn't for the stock options, they would quit their jobs in a heartbeat.
I go to the local coffeeshop and there are cute girls and middle-aged women using notebooks running Windows. 4-10 people at any given time, maybe 1-2 of which have iBooks or PowerBooks. Most of the others have notebooks from Dell. I go to the local college campus and *everyone* has a notebook PC. About 25% of these are Macs, the vast majority of the rest are Dells.
PCs and their operating systems are ubiquitous these days. They're not geek toys, they're tools for everyone. And except for the smallest handful of people, they're all running Windows or OS X. Come to think of it, I'm in the habit at peeking at what people are doing on their notebooks and I have yet to see anyone running Linux or another minority OS.
Truthfully, the average PC user is getting worried about virii and spyware. And more and more of them are running Firefox as a result. This doesn't mean they're attempting to ditch every product Microsoft makes, not by a long shot.
X-Box as a server? Sure, why not. And considering that we are reading results from convicted liers; It's cool. But one has to ask ones self, "Why are the dewellers of Redmond so fearful of Linux?" I truly believe that these people are very intelligent, and do not do things without reason. So I submit the following tensor that reprecents their fears:
Knoppix > the Redmond Product.
Thats not a safe assumption to make. A lot of organizations have site licenses for the software, so its easy for server sales to outpace OS sales.
While there may be an increase in Linux deployments, you can't infer that from any of this information.
This morning on Bloomberg News they specifically called out Halo 2 as being a very large contributor to the suprising jump in sales, as a large number of people (myself included) bought an X-Box specifically for Halo.
The dual facts that the XBox is the first modern console I've ever bought and that I've since bought ten other games is icing on the cake for them. There are a lot of people being pulled into modern consoles who were never tempted before by them.
WRONG, they reduced OPERATIONAL COSTS.
From MS Versus:
"According to an ABC News 1/22/99 article by Michael Martinez, Microsoft's own internal auditor, a respected 30 year veteran and former partner of Deloitte and Touche, was fired in 1996 after informing management that their earnings manipulations were illegal and violations of the SEC and FASB laws. He was given the option to resign or be fired and later settled for $4 million after suing under the Federal Whistle Blowers Act."
"The single most lucrative product Microsoft sells is its own stock. Microsoft receives almost as much cash inflow from the stock market as it does by selling goods and services... Basically, Microsoft receives cash by issuing employee stock options, after which the company then receives billions of dollars in tax deductions from the IRS for doing so. Add in the warrants it sells on its own stock, and the company made over $5 billion off the stock market [for the] fiscal year end[ing] July 1999, tax-free. For comparison, its after-tax net income was only $7.8 billion. Microsoft may not be much in the programming department, but its accountants are impressive." (Landley, Rob. "Why Microsoft's Stock Options Scare Me." The Motley Fool 17 Feb 2000)
Developers: We can use your help.
I think its more creating non tech-savvy groups than appealing to the non tech-savvy:
Excludability is the power to prevent usage of a desirable utility, and is required for the property holder to force payment of the user (extract exchange-value). ..."The contradiction that lies at the heart of the political economy of intellectual property is between the low to non-existent marginal cost of reproduction of knowledge and its treatment as scarce property"[23].
23. May, 2000, p. 42.
A technology supporting the property regime must build a black box not comprehensible to the smartest user, and convenient to operate for users with the lowest possible skill. Users must be deprived of their technological knowledge that grants them control over the product, or else they will bypass the security systems [34].
34. Operation Sundevil, a nationwide law enforcement campaign in U.S., directed against the hacker community (Sterling, 1994), should be seen in this light. However, direct repression against highly skilled users plays only a minor though complementary part in the agenda of securing the system from independent subjects. Its real momentum lies in lessening the skill level demanded of the average user, as is expressed in the deceitful phrase 'user-friendly technology'.
Yes I do lean towards marxism and no, this is not a anti-capitalism rant although this article does point out the obvious (for some) that we have moved from feudalism to capitalism and are GRADUALLY moving towards something else. It doesnt matter how much money companies like Microsoft make. In order to change with the time, the company and otheres like it will change significantly towards the open model. They will still have allot of money but just money as long as they dont change. That is because Information Technology and the software organisations that grow on them are not manufacturing dependent or dependent on central control...and therefore cannot be conform logically to the analogue of property..
I must say having looked at some of the presentations on Longhorn, it does actually look very impressive *ducks*.
c on ceptvid/default.aspx
While Linux is still trying to compete to become the desktop of choice, Microsoft don't seem to be resting on their laurels and are making impressive strides in the application space.
Linux while it may be becoming a strong contender for the desktop still appears to be years behind in terms of applications when you look at what Longhorn is doing
http://msdn.microsoft.com/Longhorn/productinfo/
Doesn't look like Microsoft is going to be going anywhere in the near future.
Most console hardware is only a loss leader at launch - eventually, they will get cheaper to produce, as the price of components goes down. Look at the cost of processors - you can get a Pentium 3 800 Mhz at Fry's for what, $20, if even that now? Look at Hard Drive prices - can you even find an 8 GB Hard drive on a shelf? Even if you could, what would you pay for it?
And you have to figure that MS is buying bulk, and is getting an even cheaper price. So, yes, I would image right now XBox hardware sales are giving MS profit.
And as far as Halo 2 goes... even if it comes out for the PC, I won't be buying it. Nor will I buy Age of Empires 3. (No, I will not pirate them either - I'm just not interested in owning or playing any Microsoft product.)
Besides - Burnout 3 is also a helluva lot of fun on my PS2.
I'd say you're right. No Microsoft OS will be as popular or well-received as Windows 95--it was (one of?) the first to have Internet Explorer bundled, and back then a browser bundled with a relatively common OS was considered teh hot (especially over Mac OS). Piracy, Linux and IE security issues are certainly slowing down Windows sales--obviously a bad thing for the profits of the company we love to call M$.
As Linux becomes well-advertised and even easier to use, I expect the distros to topple the "Mac-killer."
You can hold down the "B" button for continuous firing.
I bet they just sold more XBoxes at less of a loss????
Paying taxes to buy civilization is like paying a hooker to buy love.
I have not looked at the 10Q yet. But right after I worked there, Microsoft started very agressive cost-cutting. Benefits, etc. Even my whole department was eventually moved to India. I seriously doubt that this is primarily due to increased sales (MS usually only has notably large increases with the release of products) but rather to these cost cutting measures.
Otherwise, it would seem like an artifact of accounting (revenue posted one quarter but not earned until this quarter, etc).
LedgerSMB: Open source Accounting/ERP
Some good news... I just handed out three copies of KNOPPIX_V3.7-2004-12-08 today to co-workers and its still only 8:03 in the morning.
One of them just had his hard drive (or something) fail to boot (could not find OS). It's not clear yet what whether the drive is any good, but if is just corrupted OS files ==> Knoppix to the rescue!
Another was complaining that Linux doesn't like his older laptop with one of the first GeForce-2Go chipsets ==> GamesKnoppix-3.7-0.1-EN will prompt you about loading load the proprietary nVidia drivers on boot. Hey, it might work! You just have to remember when you're trying to type "yes" at the prompt that although it is the "English" version it still thinks you've got a German keyboard at boot so the Y and the Z buttons are swapped.
Finally, there's a fellow who has been thinking about trying GNU/Linux on his old Windoze hardware. So I burnt another copy of Knoppix and handed it to him.
Ahh... I've got a warm fuzzy feeling.
Now if I could just get back that copy of _Knoppix_Hacks_ that I lent to my neighbor so I could lend it out to someone else.
Religion is poison to rationality, and we lose sight of that at our own peril. -- Lurker2288
One thing that Microsoft has always done is keep their people feeling that Microsoft is the underdog and needs to keep fighting. They believe that all the money belongs to them by right and they are incredibly bugged by ANYONE else who makes money in their business area. They also feel that the next innovation could obsolete them and while this does not drive them to innovate, it does drive them to co-opt others' innovations quickly.
My company upgraded my box yesterday, from win ME to win 2k pro. On an old PIII.
Ohh and autocad 2005LT is buggy, you need to download autodesk's sp1 if you want a stable autocad.
Sounds like a joke huh?