Filed under: IT Strategic Planning, Microsoft, Risk Mitigation, Service & Support, Software, Uncategorized | Tags: Windows XP Vista 7 downgrade OEM
A closely watched topic for many of our cleints: how long can we continue downgrading our new hardware to XP, after MSFT ships Win7? Answer: April 2011 or upon release of SP1, whichever comes first.
Details from Mary Jo Foley (who’s a great source to keep up with)
http://blogs.zdnet.com/microsoft/?p=3104
Filed under: IT Financial Management, Microsoft, Total Cost of Ownership, Uncategorized
Microsoft reported earnings for their fiscal 3rd quarter.
- The big news is that this is their first ever year over year decrease in revenue and earnings (as a public company).
- “Unearned Revenue“ is Microsoft’s bucket for future Software Assurance (SA) / Payment obligations, usually via Enterprise Agreements that are in flight. This number went from $12.2b to $9.6B (-21%) from June 30 2008 to March 31 2009.
o Unearned Revenue is down across all of their key product segments, even Servers which is their strongest at the moment.
o This is one of the key numbers to watch in their financials and being so significantly down it means that customers in droves are defecting partially or wholly from the EA / SA model, which is bad news for Microsoft’s annuity business and thus, its stock price.
o It also casts doubt on the typical MSFT story about EA renewal rates being “in line with historic” which they are on record as saying recently.
o This number is mainly disconnected from PC shipments so they can’t use that excuse either. I view this as one of the most significant numbers reported.
- Random note – they settled with the IRS re: the 2000-2003 audit, paying $3.1 billion during 1Q09.
- $1.4 b to the EU for antitrust settlement, more pending.
- Class action suits re: the “ready for Vista” pc scam: up to $2.7b
- You may recall their share buy-back program; they announced up to $40b in spending on that, so far they’ve actually only spent $5.5b. hmmm, maybe they need to use their cash elsewhere?
- In the usual note about forward looking statements, MSFT noted “intense competition across all markets”. Perhaps some clients should note that as well?
- They’re still in fine shape re: cash, with $40b or so current assets and cash flow of $6b./qtr. But I noted that they started up a couple of lines of credit, maybe for insurance purposes?
