Microsoft Revenues Suggest Cloud Still Just a Dream

By Channel Insider Staff  |  Print this article Print

Microsoft's "all in" message about cloud computing may be premature if you look at the company's most recent earning report. While cloud may be the future, Microsoft revenues from locally-installed software such as Windows 7 and Microsoft Office shows that these lines of business will be essential to Microsoft's financial health for the immediate future.

Microsoft’s quarterly revenues of $16.04 billion exceeded many industry analysts’ expectations, and suggested that the economy –at least the portion of it that purchases software—is indeed slowly reviving from the deepest global recession in a generation. However, a deeper analysis of those results also reveals a peculiar dichotomy: despite Microsoft’s "all in" approach to cloud computing, the company’s fortunes are still very much tied into that most traditional of tech areas, the desktop.

"Microsoft’s messaging around cloud is becoming increasingly aggressive, but its execution in traditional businesses had revenue pouring in during [the quarter]," Allan Krans, an analyst with Technology Business Research, wrote in a July 22 research note. "Windows 7 and Office 2010 have generated significant growth despite the ongoing economic uncertainty."