Windows: $5.88 billion (including deferral and pre-sales revenues) Microsoft Business Division: $5.69 billion Server and Tools: $5.19 billion Entertainment and Devices: $3.77 billion Online Services: $869 million
Excluding the impact of the Windows Deferral, approximately 65 percent of the total Windows Division revenue came from Windows operating systems purchased by OEMs, according to Microsoft's latest 10-Q. "The remaining Windows Division revenue is generated by commercial and retail sales of Windows, Surface, PC hardware products, and online advertising."
So Windows OEM, commercial and retail sales are all part of the revenues reported by the Windows division, as are "Windows Servcies" like Messenger, Outlook.com and SkyDrive. The Surface business also reports in through the Windows Division.
How did OEM sales grow when the PC market was declining during the quarter? OEMs buy Windows licenses in bulk in regular intervals prior to selling Windows PCs with these licenses, from what I've heard from my contacts. This means Microsoft collected from its OEMs some unknown number of Windows license monies even though its OEMs may have only sold a fraction of the Windows PCs to which these licenses are attached.
The Microsoft Business Division (MBD) is where Office, SharePoint, Exchange, Lync, Yammer and Office 365 revnues are reported. It's also where the Dynamics ERP and CRM products sit. The Office client, server and services constitute more than 90 percent of the division's revenue, according to Microsoft's financial statements.
MBD revenue decreased, "due mainly to the deferral of $689 million of revenue related to the Office Upgrade Offer and $99 million of revenue related to Office Pre-Sales," the Softies said. But overall sales of the current versions of Office were still up, due primarily to business sales of both Office (volume-liensing revenues) and Dynamics.
Server and Tools Business (STB) had another strong quarter. This is where Windows Server, SQL Server, Windows Azure, Visual Studio, System Center, Windows Embedded, and "enterprise services" (premier product support, Microsoft Consulting and more) all sit. About 80 percent of STB revenues come from product sales by individuals, volume license sales, licenses sold to OEMs and retail packaged product.
E&D had an off quarter due to declining Xbox 360 sales and gaming consoles overall. "Xbox 360 platform revenue decreased $1.1 billion or 29%, due mainly to lower volumes of consoles sold and lower video game revenue, offset in part by higher Xbox LIVE revenue," according to Microsoft's financial statements.
Xbox, Xbox Live and Xbox accessories aren't the only products and services reporting into E&D. Mediaroom (IPTV software), Windows Phone and Skype are all part of E&D. On the Windows Phone front, patent-licensing revenues (the monies Microsoft collects from Windows Phone partners and Android and Chrome OS vendors who are paying Microsoft patent-licensing royalties) both figure into the equation. Microsoft officials said Windows Phone revenues increased $690 million this quarter and that this number included both patent licensing revenues and sales of Windows Phone OS licenses.