5 Takeaways From Microsoft’s Earnings Call

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Windows 7 is a Hit

Windows 7 has sold more than 450 million licenses since its launch in the fall of 2009.

Moreover, Microsoft says that it considers that it is in the mid-season of the business upgrade cycle, meaning even more licenses could continue to sell.

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During the conference call following Microsoft’s first-quarter revenues for fiscal 2012, the company laid out some key takeaways for investors and industry followers.

The company might trail Apple in revenue and market cap, but it still maintains mindshare for much of the computing industry. With Windows 7, Microsoft has managed to move more than 450 million licenses in just two years.

The flatness of the personal computer market as a whole (Apple being the exception) means that Microsoft has to look at its other business units to help bring in revenue. Windows 8, which will run on ARM (as well as Intel) processors and support multiple device types, is crucial to filling future device category niches.

Microsoft Business Division was up 8% in revenues year over year, even without a major Office release to push sales. Part of this increase was helped by Microsoft’s Office 365 product, already gaining more momentum in ten weeks than Microsoft built over the last two years with its earlier online office offerings.

On the gaming and entertainment front, Gears of War 3 is a big hit and Microsoft says more than 70 Kinect titles will be available for the holidays.

Windows Phone and Bing continue to struggle. While Bing has gained traction in the last year, growing 3.5% since 2010, it is still not making money. Windows Phone 7.5 “Mango” has received positive reviews and Microsoft hopes new handsets — including those from its new partnership with Nokia — will help the platform find its footing.