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Where Microsoft's Profits Come From
derrida writes "Microsoft is the largest, most profitable software company in the world. In case you had any doubts about where Microsoft's profit comes from, there's nothing better than a graph to make all those numbers clear. As you may have guessed, the desktop division is quite profitable, while the online division is a money pit."
After all these years... it's still Windows and Office.
It's the Windows, Office and Server divisions.
Think of SharePoint as the jack-of-all-trades in the business software realm. Companies use it to create Web sites and then manage content for those sites. It can help workers collaborate on projects and documents. And it has a variety of corporate search and business intelligence tools too.
Microsoft wraps all of this software up into a package and sells the bundle at a reasonable price. In fact, the total cost of the bundle often comes in below what specialist companies would charge for a single application in, say, the business intelligence or corporate search fields.
Microsoft declines to break out the exact sales figures for the software but said that SharePoint broke the $1 billion revenue mark last year and continued to rise past that total this year, making it the hottest selling server-side product ever for the company.
Crucially, Microsoft has found a way to create ties between SharePoint and its more traditional products like Office and Exchange. Companies can tweak Office documents through SharePoint and receive information like whether a worker is online or not through tools in Exchange. These links have Microsoft carrying along its old-line software as it builds a more Internet-focused software line.
"SharePoint is saving Microsoft's Office business even as it paves the way for a new era of Microsoft lock-in," said Matt Asay, an executive at Alfresco, which makes an open-source content management system. "It is simultaneously the most interesting and dangerous Microsoft technology, and has largely caught its competitors napping."
Microsoft's SharePoint Thrives in the Recession [August 7, 2009]