The importance of Windows drops only third within Microsoft

With the announcement of the fourth quarter 2016 financial report, people were able to understand the revenue of Microsoft’s various product lines. Through in-depth analysis of the financial statements, a major trend that is obviously different from the previous ones is gradually clear: as the company has increased investment in application software subscriptions and cloud computing services year by year, as the iconic product from which it started, Windows operations The position of the system within the company has further declined.

Due to Microsoft's repeated restructuring and financial reporting changes, it has been difficult for the outside world to specifically track the long-term performance of its products. However, the latest financial report given to the US Securities and Exchange Commission on the previous day clearly discloses its main product line on page 93. Long-term performance trends. This allows people to compare horizontally across Microsoft's various product lines, and has always traced the performance of these products back to 2008. As you can clearly see from the chart, the Windows business has been less than Office and cloud services since 2014.

According to the latest financial report, the Office product line achieved revenue of US$23.6 billion in the 2016 fiscal year ending June 30, a slight year-on-year increase. In addition, the growth of server and tool products has been rapid, rising from 18.6 billion U.S. dollars in fiscal year 2015 to 19.2 billion U.S. dollars this year. The Windows only ranked third, only $ 14.7 billion in annual revenue, including $ 6.6 billion with the Windows 10 release of deferred revenue related. This figure is lower than the 14.8 billion U.S. dollars in 2015, which is far from the historical high value of 18 billion U.S. dollars in 2010.

This trend shows that under the leadership of CEO Satya Nadella, cloud computing technologies and services are of great significance to the company's transformation. The rise of the Azure cloud computing platform has indeed boosted Microsoft's server products and tools business. The Office 365 software subscription service and mobile applications also contributed to the continued growth of the entire Office product line, making it the most advantageous product line within the company.

It is undeniable that the free promotion plan of WIN10 has affected the revenue of the Windows product line. However, the decline in Windows revenue does reflect the contraction in the traditional PC market. According to market research firm IDC, global PC shipments are expected to decline by 7.3% this year, down 2% from previous expectations.

Although Nadella stated last week, Windows 10 is Microsoft's fastest-growing Windows system. However, according to NetMarketShare data, since the system was released, the share of Windows 7 still exceeded 47%. After stopping the free promotion program, as the main force of the Windows product line, the future performance of WIN10 is really worrying.

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