Enterprise Rules, But Microsoft’s Doubling Down on Consumers

Microsoft HeadquartersDespite taking its first loss since it became a public company, analysts note that Microsoft’s enterprise business is going gangbusters.

Its Server and Tools unit, which sells server versions of Windows, Azure cloud services and other enterprise software, finished the fiscal year with $18.7 billion in revenue, compared with $18.4 billion for Windows. Windows was more profitable, though, bringing in $11.5 billion compared to S&T’s $7.4 billion.

Microsoft’s Business Division, which sells Microsoft Office, posted $24 billion in revenue, adding $15.8 billion to the bottom line.

Investment bank Evercore Partners called the enterprise results “extremely impressive,” according to Reuters, but said the company will have to invest heavily in the tablet, search and smartphone markets to regain share from Apple and Google. That appears to be Microsoft’s aim in hiring Mark Penn, a former advisor to both Bill and Hillary Clinton, to lead a team focused on consumer strategies.

Mary-Jo Foley at ZDNet pegged the consumer business as Microsoft’s weak spot, but also the area with the most room for growth.

The company added 3,900 jobs over the past year, though more than 2,700 of them were outside the U.S. GeekWire reports that 400 were added in the Seattle area. Meanwhile, the company’s Silicon Valley office encourages job-hopping between divisions to give workers a better view of the bigger picture.

Microsoft has a rash of launches scheduled for the rest of the year, including Windows Server 12 in September, Windows 8 on Oct. 26, and Windows Phone 8 in October or November. Office 2013 is expected next February. And from its game development studio 343 Industries, Halo 4 is expected to land Nov. 6. A new Xbox device is expected in 2013.

Meantime, the Redmond giant is going to the mat to woo interns – it ranked No. 2 after Google on a recent Glassdoor list of the best places to intern. (Research interns at Microsoft make on average $6,746 a month, while program manager interns make about $5,232.)

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