Business Overview
Microsoft is a technology company whose mission is to empower every person and every organization on the planet to achieve more. The chart above highlights Microsoft Revenue by segment. They strive to create local opportunity, growth, and impact in every country around the world. Their platforms and tools help drive small business productivity, large business competitiveness, and public-sector efficiency. They also support new startups, improve educational and health outcomes, and empower human ingenuity.
They generate revenue by licensing and supporting an array of software products; offering a wide range of cloud-based and other services to people and businesses; designing, manufacturing, and selling devices; and delivering relevant online advertising to a global audience. Their most significant expenses are related to compensating employees; designing, manufacturing, marketing, and selling their products and services; datacenter costs in support of their cloud-based services; and income taxes.
Microsoft Revenue By Segment
| Revenue By Segment | Q1 2018 |
| Productivity and Business Processes | $8238 million |
| Intelligent Cloud | $6922 million |
| More Personal Computing | $9378 million |
Their reportable segments are described below:
Productivity and Business Processes: Their Productivity and Business Processes segment consists of products and services in their portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. This segment primarily comprises:
- Office Commercial, including Office 365 subscriptions and Office licensed on-premises, comprising Office, Exchange, SharePoint, Skype for Business, and Microsoft Teams, and related Client Access Licenses (“CALs”).
- Office Commercial, including Office 365 subscriptions and Office licensed on-premises, comprising Office, Exchange, SharePoint, Skype for Business, and Microsoft Teams, and related Client Access Licenses (“CALs”).
- Office Consumer, including Office 365 subscriptions and Office licensed on-premises, and Office Consumer Services, including Skype, Outlook.com, and OneDrive.
- LinkedIn, including Talent Solutions, Marketing Solutions, and Premium Subscriptions.
- Dynamics business solutions, including Dynamics ERP on-premises, Dynamics CRM on-premises, and Dynamics 365, a set of cloud-based applications across ERP and CRM.
Intelligent Cloud: Their Intelligent Cloud segment consists of their public, private, and hybrid server products and cloud services that can power modern business. This segment primarily comprises:
- Server products and cloud services, including Microsoft SQL Server, Windows Server, Visual Studio, System Center, and related CALs, and Azure.
- Enterprise Services, including Premier Support Services and Microsoft Consulting Services.
More Personal Computing: The chart above highlights Microsoft Revenue by segment. Their More Personal Computing segment consists of products and services geared towards harmonizing the interests of end users, developers, and IT professionals across all devices. This segment primarily comprises:
Windows, including Windows OEM licensing and other non-volume licensing of the Windows operating system; Windows Commercial, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; Windows Internet of Things (“IoT”); and MSN advertising.
Devices, including Microsoft Surface, PC accessories, and other intelligent devices.
Gaming, including Xbox hardware and Xbox software and services, comprising Xbox Live transactions, subscriptions, and advertising (“Xbox Live”), video games, and third-party video game royalties.
Search: Their Search business, including Bing and Bing Ads, is designed to deliver relevant online advertising to a global audience. They have several partnerships with other companies, including Oath (formerly Yahoo! and AOL) which is owned by Verizon, through which they provide and monetize search queries. Growth depends on their ability to attract new users, understand intent, and match intent with relevant content and advertiser offerings.
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