Microsoft's Server and Tools unit now includes six $1 billion businesses

Microsoft's Server and Tools unit now includes six $1 billion businesses

Summary: Microsoft's Server and Tools Business currently includes six separate $1 billion businesses -- and possibly more to come.

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Microsoft officials have talked in the past about the company's billion-dollar business club -- the handful of product groups that regularly contribute a billion dollars or more to the company's coffers.

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(Some of these billion-dollar contributors are now up to $2 billion, such as the SharePoint unit, as its leaders said publicly last week.)

Microsoft's Server and Tools Business currently houses six of the $1 billion businesses, according to STB's chief financial officer Curt Anderson. Anderson addressed attendees of UBS' Global Technology Conference on November 15.

The six STB businesses generating $1 billion each, according to Anderson:

The first four already were on Microsoft's previously disclosed $1 billion list -- as were a number of non-STB businesses, including Windows, Office, Xbox, Unified Communications; SharePoint; Dynamics (ERP & CRM); and online display/search advertising. Desktop access was on Microsoft's list of up-and-comers in 2010. And I'd assume Office 365 is on the $1 billion list, as well, by this point, as Chief Operating Officer Kevin Turner made it clear earlier this year that Office 365 was well on its way to surpassing SharePoint as Microsoft's fastest-selling product ever. (Turner also said he'd personally intervene in sales when necessary to avoid losing any Office 365 deals to the competition.)

The enterprise services business mentioned in the STB list above is not Global Foundation Services, i.e., the team that runs the Microsoft datacenters powering Office 365, Azure, Bing, Xbox Live, etc. GFS is part of Microsoft's Online Services Division, not STB. However, Enterprise Services is responsible for supporting some of these Microsoft-hosted services.

Recently, in fact, the Windows Azure team blogged about a revamp of its support offerings to include five different support options, ranging from free, to high-end/premium, for Azure. When I asked Microsoft officials what changed in terms of previous Azure support and these new tiers, a spokesperson said "the previous support offerings were limited in comparison and only provided basic support with no mechanism for faster response times or proactive engagement without a separate Premier contract."

What's likely to be among the next Microsoft businesses to cross the $1 billion threshhold? If STB officials have their way (and internal projections are met), Embedded (which became part of STB back in 2010)  could be added to the list. 

From a job posting on the Microsoft site: "If you like working in a growing team that delivers solutions to the world of embedded devices and has an aggressive goal of reaching $1 billion in revenue in the near future, the Windows Embedded team is the perfect place for you!"

Guess it's not too hard to see why STB is now the second largest business unit at Microsoft (after Office)....

Topics: Servers, Cloud, Data Centers, Microsoft, Operating Systems, Software Development

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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7 comments
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  • What I don't get

    With this data, showing that their core business really lies with the enterprises, how come the new Windows series interfaces (Both server and desktop) are so enterprise-unfriendly?
    xarinatan
    • Enterprise v Consumer

      Which Interfaces are you complaining about?

      I still use my Windows 8 Desktop, from the Desktop and I use the Remote Server Administration tools and System Central to manage my server environments (as recommended) instead of running RDP to each box.

      Nothing has changed from this perspective, other than the new tools and features available.
      Rastor9
    • I disagree...

      I actually think there's plenty of enterprise reason to adopt Windows 8 (and even Windows RT) *if* it's planned and evaluated properly.

      There's a lot to be said for enterprise apps in the Modern UI... sandboxed for security, lack of malware, and excellent virtualization support.

      Besides, as Rastor9 points out, you have the option of staying in the desktop pretty much full-time if your needs require that-- no learning curve required. Don't believe all the gloom and doom.
      GoodThings2Life
    • They need traction in the mobile space

      So they bother desktop and server users with an inappropriate mobile user interface to drive mobile recognition and familiarity with the intention to generate mobile unit sales. That's the theory, anyway.
      symbolset
  • Microsoft's Server and Tools unit now includes six $1 billion businesses

    That blows away the theory of Microsoft being a sinking ship and then something about rats leaving it. Good to see a good ol' American business survive like this.
    Loverock Davidson-
    • Indeed.

      I don't know why people love their gloom and doom.
      GoodThings2Life
      • The browser you love to hate.

        Microsoft seems to be embracing our need to hate with this new IE ad campaign.

        It is like watching wrestling. We know its fake, but we still keep watching. This is something in our psychology.

        Desktops will remain around for years to come. Just like mainframes, which we now call supercomputers, and servers, have.

        But, if Microsoft wants to avoid the IBM route, and every indication is they do, then evolving their existing properties toward the new hotness is necessary.

        I personally love Windows 8. It runs all of my "well written" programs, and allows me to let my 4yr old niece use my computer to draw with Fresh Paint.

        I can run it in a virtual machine on a mac, and I can roll it out to all of my home pcs, creating a one button fix it solution that I don't have to be at home to implement.

        Instead of scheduling holidays to fix the families' systems.

        And, everything feels faster than it did in Windows 7, for once. (This is big. I have been upgrading MS systems since Win 95. This is a first. And EPIC.)
        dragorth