Microsoft: We are focusing on eight core businesses

Microsoft: We are focusing on eight core businesses

Summary: At the kick-off of the company's annual Financial Analyst Meeting (FAM) in Redmond on July 29, Microsoft execs attempted to clarify where the company is focusing its efforts currently and in the coming year.

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Microsoft critics tend to knock the company for being either too reliant on its cash cows (Windows and Office) or too scattered, chasing too many nonprofitable businesses.

At the kick-off of the company's annual Financial Analyst Meeting (FAM) in Redmond on July 29, Microsoft execs attempted to clarify where the company is focusing its efforts currently and in the coming year. Officials also emphasized repeatedly that in spite of all its talk and high-profile marketing push on the consumer front, Microsoft's enterprise products constitute a huge part of the company's revenue base.

Actually, Microsoft has eight core focus areas, General Manager of Investor Relations Bill Koefoed, told the Wall Street analysts (and a few of us press types) attending the day-long event.

The eight, according to Koefoed:

  • Xbox and TV
  • Bing
  • Office
  • Windows Server
  • Windows Phone
  • Windows
  • Business users
  • SQL Server

How does the cloud fit in? As Microsoft phases in more cloud offerings, things like Windows Azure, SQL Azure, Business Productivity Online Suite (BPOS), Windows Intune (system management service), they will replace these core products. Example: SQL Azure will come to replace SQL Server for at least some customers at some point.

Koeford said there are a number of "enablers" of these eight, specifically:

  • Stores and marketplaces
  • Services and support
  • MSN
  • Mice/keyboards
  • Mediaroom (IPTV)
  • Visual Tools
  • Windows Live
  • Dynamics (CRM and ERP)

Koefoed showed a breakout slide that showed plainly that enterprise customers are the largest user segment for Microsoft. Here's how Microsoft's customer base looks today:

  • Enterprise 35.8%
  • Small/midsize business 20.5%
  • Consumer and online 16.9%
  • OEM 26.8%

Chief Operating Officer Kevin Turner said that in fiscal 2011 (which commenced on July 1 for Microsoft), Microsoft will be leading with the cloud when it sells. He said this positioning will allow Microsoft to sell more on-premises products than ever before. Microsoft is characterizing its cloud play as "IT as a service" as a way to make clear that its cloud products are aimed at IT pros, not just developers.

Microsoft also will continue to drive Windows 7 and Office 2010 in the coming year, Turner said. He said to expect a public beta of Internet Explorer 9 in September 2010.

What's your take? Is eight too many cores for Microsoft to focus on?

Topics: Data Management, Data Centers, Enterprise Software, Microsoft, Operating Systems, Software, Windows

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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40 comments
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  • WTF?! Mice/keyboards !

    Mice and keyboards are enablers? Of what? What does this even mean?
    davebarnes
    • RE: Microsoft: We are focusing on eight core businesses

      @davebarnes: enablers of, well, finger cramps I guess. :)
      Random_Walk
    • RE: Microsoft: We are focusing on eight core businesses

      @davebarnes

      I was wondering exactly the same thing!
      NPGMBR
      • RE: Microsoft: We are focusing on eight core businesses

        @NPGMBR <br><br>And Microsoft can take over Yahoo's search in the US and that is not a problem? If they were really concerned about the search market in Japan, they would have used the relationship they have forged with their search partnership here to get a search deal done for Japan <a href="http://www.arabaoyunlarimiz.gen.tr/yapboz-oyunlari/">yapboz oyunlari</a>
        Arabaoyunlarimiz
    • RE: Microsoft: We are focusing on eight core businesses

      @davebarnes, it means the push to tablets will fail unless the business unit for clicks and keystrokes also learns to include fingertip events like pinches, pans, & zooms. Failure to do so means that Office, the essential cash cow *will not* run properly on tablet computers (neither mice nor keyboards). I hope MSFT is listening to Dick Brass after these many years of having ignored the VP of fingertip events. But more likely, they will fail to pay attention.
      HaYouMustBeJoking
    • Enablers

      I would say that without keyboards or mice it would be pretty hard to do your job. Therefore they are enablers.
      richintx
  • Bye bye Zune

    It's truly been a dud Mary Jo.
    GoPower
    • which is a shame, as I like it

      better then the iPod, personally.
      John Zern
      • I liked the Zune better

        @John Zern - I thought the Zune was a much better device. I even liked the Zune store more than the iTunes store. My Zune never made my pc run slow.
        Fark
    • Fark you dont need anything to make your PC run slower

      Windows is more than enough!
      TD
      theo_durcan
    • RE: Microsoft: We are focusing on eight core businesses

      @GoPower

      They are not getting rid of Zune. They have made it clear that they are making it more of a platform than a device. So when you see XBOX, TV, Windows and Windows Phone, you can assume Zune is included.
      rjohn05
      • That's because it failed as a device

        @rjohn05 ... now they're acting like they meant to do that all along.
        It's failing as a service too.
        PlaysForSure, Kin, Zune. RIP
        HollywoodDog
      • Talk about failing

        You should place your name right up there next that list, HD!

        LOL!
        :)
        John Zern
  • Most of the 'areas' are useless white elephants

    Bing has slurped down probably billions in shareholder money for a small fraction of Google's market. Great for developers, testers, marketing slime and ad agencies - bad for shareholders.
    If HollywoodDog were tapped as CEO, I'd probably sell off any division not currently making money (excepting necessary stuff like developer tools), do large headcount reductions, freeze salaries, and greatly increase the dividend, and promise to keep raising it. In my tenure, priority zero would be shareholder value, shareholder dividends.
    Shareholders, shareholders, shareholders.
    HollywoodDog
    • Sure thing Market A...er HolywoodDog

      You shills are getting harder and harder to distinguish between anymore: same old nonsense, same lame postings.

      Can't your handlers come up with anything original for you guys to post, anymore?
      John Zern
    • RE: Microsoft: We are focusing on eight core businesses

      @HollywoodDog:

      And your approach would lead to Microsoft being out of business in five years or less, spending the last few hundred million of its cash defending shareholder lawsuits resulting from the dividend promises.
      cuhulin
    • Developers Developers Developers and things that matter

      @HollywoodDog
      I understand that Microsoft is a corporation with shareholders but by cutting R&D and not investing more, you'll get the same old things and not innovate.
      Apple doesn't make money by not going and focusing on other markets.

      iPod wasn't really in line with macs and well, macs but they went for this segment with a new product that probably cost a lot to develop and get a hold of the market (relatively) but now it's become such a big name.

      It makes sense to collaborate and consolidate the Microsoft empire but don't cut everything.
      sitmonkey
  • One of these things is not like the others...

    How did "Business users" make this list? Do they make business users? Oh, I get it. They will "focus" on business users. I guess it's not surprising they don't focus on consumers, but it is surprising that it's there at all since the trend is a blurring line between business users and consumers.
    rynning
    • RE: Microsoft: We are focusing on eight core businesses

      @rynning: It's called re-arranging deck chairs. :)
      Random_Walk
    • RE: Microsoft: We are focusing on eight core businesses

      @rynning, I read this as <b>Sharepoint<b>. A consumer doesn't need Sharepoint.
      HaYouMustBeJoking