Five Businesses Step into FY'11

Executives offered limited insight into Microsoft’s business at the company’s annual Financial Analyst Meeting (FAM) in July 2010, explaining in broad terms the business case for cloud computing and the company’s intention to promote desktop Windows on touch-screen PCs to respond to Apple’s iPad and similar devices. In contrast with prior years’ FAMs, the company offered almost no new information about particular products or business segments and did not announce any major new business areas. Rather, the company appears to be concentrating on preserving its current businesses and expanding them into “the cloud.”

A Subdued Affair

Microsoft’s business staged a modest recovery in fiscal year 2010 (FY’10), which ended on June 30, as revenue grew 7% from last year to US$62.48 billion and net income grew 29% to US$18.76 billion. Both revenue and net income were above their previous all-time highs set in FY’08, providing a sharp contrast with the declines in FY’09. Most of this growth was provided by the Windows and Windows Live segment, where revenues increased 30% from the previous year thanks to a pickup in PC purchases and the release of Windows 7. (For a chart of financial performance by business segment, see “Five Businesses: Financial Overview“.)