Microsoft Results Disappoint After Hefty Surface RT Charge

The software giant’s Server & Tools revenue grew 9 percent for the fourth quarter and 9 percent for the full year, driven by double-digit percentage revenue growth in SQL Server and System Center.

Windows Division revenue grew 6 percent for the fourth quarter and 5 percent for the full year. Excluding the impact of the prior year Windows Upgrade Offer revenue deferral, Windows Division non-GAAP revenue decreased 6 percent for the fourth quarter and 1 percent for the full year. In June, Microsoft released the public preview of Windows 8.1 which will be made available to OEMs in August.

Windows Advantage

Research group Chitika Insights took a long term look at Microsoft’s Windows web traffic from Windows 8. Chitika noted that Within the desktop operating system (OS) marketplace, Windows continues to hold a substantial advantage over its competitors overall, but the growth rate of its newest OS version, Windows 8, has flattened in recent months.

“Windows’ hold on the continental desktop OS marketplace remains as strong as ever. While this is certainly good news for Microsoft, it is tempered by the continued growth of mobile Web browsing, where the company is not as strong, along with the more gradual slope of Windows 8 growth rate within North America,” Chitika Insights said in a post. “However, Microsoft’s decision to make some changes to the recent Windows 8.1 update may spur more users to adopt the new OS, as the company has attempted to address some of the user concerns surrounding the initial version of the software.”

Microsoft’s Online Services Division revenue grew 9 percent for the fourth quarter and 12 percent for the full year, driven by an increase in revenue per search and volume. Bing organic US search market share was 17.9 percent for the month of June 2013, up 230 basis points from the prior year period, Microsoft said.

The company’s Entertainment and Devices Division grew 8 percent for the fourth quarter and 6 percent for the full year. During the quarter, transactional revenue within Xbox LIVE grew nearly 20 percent, and Microsoft announced its next-generation gaming and entertainment console, Xbox One.

“We continue to see strong demand for our enterprise products and services, with more and more customers making long-term commitments to the Microsoft platform,” said Kevin Turner, chief operating officer at Microsoft, in a statement. “The growing adoption of our cloud services, including Office 365, Windows Azure and Dynamics CRM, continues to demonstrate our leadership position in the cloud.”

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Originally published on eWeek.