Microsoft’s Q3 earnings show steady Office gains, sharp drop in Surface revenue

www.office.com/setup Blogs: The earnings are in for Quarter 3 of fiscal year 2017, offering investors and fans alike a look at how things are going for Microsoft as they move forward with their business plans. There are some ups and downs this quarter, with Office and gaming revenue on the rise and Surface revenue taking a considerable dip.

www.office.com/setup Blogs: Here’s a look at the highlights:

· Windows OEM revenue increased 5% (up 5% in constant currency)
· Windows commercial products and cloud services revenue increased 6% (up 6% in constant currency)
· Surface revenue decreased 26% (down 25% in constant currency)
· Search advertising revenue excluding traffic acquisition costs increased 8% (up 9% in constant currency)
· Gaming revenue increased 4% (up 6% in constant currency)

Increases from ad revenue, gaming, cloud services, and OEM revenue all show signs of gradual improvement. On the other hand, a sharp drop in revenue hit the Surface line, tanking numbers down 26%. That’s a pretty huge loss of revenue for any one period of time, and might prove as some reasonable cause for alarm for investors looking at the hardware as possible inroad into the company encroaching Apple-like territory. That being said, it may also be a by-product of the fact that we haven’t had a big announcement regarding the Surface Pro line in quite a while.

The Q3 earnings report leaves investors with a split impression, with numbers doing exceptionally well for everything besides Surface products. We’ll be getting a better idea of how things shake out as investors take the time to digest some of the information in the Q3 report.

Office 365 now reaches 100 million commercial active users

www.office.com/setup Blogs: Microsoft released yesterday its earnings reports for the third quarter of its 2017 fiscal year, and Office 365 revenue was once again one of the main highlights. Overall, revenue in Productivity and Business Processes reached $8 billion during Q3 (up 22% year-over-year), and Microsoft CEO Satya Nadella emphasized the following points during the company’s earnings call:

We crossed a major milestone with more than 100 million monthly active users of Office 365 commercial. Office 365 commercial seats grew 35 percent year-over-year, and revenue is up 45 percent in constant currency.

www.office.com/setup Blogs: Both Office 365 commercial and consumer businesses were up, and the company shared the following details in the press release:

  • Office commercial products and cloud services revenue increased 7% (up 8% in constant currency) driven by Office 365 commercial revenue growth of 45% (up 45% in constant currency).
  • Office consumer products and cloud services revenue increased 15% (up 14% in constant currency) and Office 365 consumer subscribers increased to 26.2 million.

Back in January, Microsoft shared during its FY2017 Q2 results that Office 365 consumer subscribers reached 24.9 million, which means that the company won 1.3 million additional subscribers in the last quarter. However, it’s clear that Office 365 business customers remain much more valuable for Microsoft. “Across industries, customers recognize Office 365 is the productivity platform of choice,” shared Nadella during the company’s earning calls, adding that “we continue to innovate and add new value”. And with Microsoft Teams now being generally available to Office 365 commercial customers, the company seems well positioned to keep growing its Office 365 user base in the coming months.

Ignite 2017: As expected, Skype for Business will become part of Microsoft Teams

www.office.com/setup Blogs: At its Ignite conference today, Microsoft officially announced that it plans to make Microsoft Teams the core communication client in Office 365. The team collaboration app will soon integrate all Skype for Business Online capabilities, and it will replace the current Skype for Business client in Office 365 once it achieves feature parity.

www.office.com/setup Blogs: This announcement is part of Microsoft’s “new vision for intelligent communications in Office 365,” with Microsoft Teams as the central hub for team communication and collaboration. After recently launching a new Dial In Conferencing feature in Teams in public preview, Microsoft detailed today all the upcoming communication features including inbound and outbound calls to PSTN numbers, hold, call transfer and voicemail, audio conferencing preview, as well as full interoperability between Team and Skype for Business.

It’s not the end of the road for Skype for Business though: the Redmond giant also announced today a new version of Skype for Business Server to be released in the second half of calendar year 2018. This new version will be for “customers who are not yet ready to move their PBX and advanced calling capabilities to the cloud,” explained Microsoft in the press release.

Ignite 2017: Microsoft introduces two new Microsoft 365 offerings, as well as new capabilities

www.office.com/setup Blogs: At the Microsoft Ignite 2017 conference, Microsoft announced the expansion of Microsoft 365. Announced at Microsoft Inspire few months ago, Microsoft 365 brings together Office 365, Windows 10, and Enterprise Mobility + Security to provide a complete, intelligent solution for organizations.

www.office.com/setup Blogs: The two new Microsoft 365 offerings are:

  • Microsoft 365 Education: It includes Office 365 for Education, Windows 10, Enterprise Mobility + Security, and Minecraft: Education Edition and gives students, faculty, and staff everything they need to create and collaborate securely.
  • Microsoft 365 F1: It includes Office 365 F1, Windows 10, and Enterprise Mobility + Security and is designed to maximize the impact of the Firstline Worker. Firstline Workers are those employees who are first to engage customers, represent a company’s brand, and see products and services in action.

Firstline workers include sales associates, factory workers, customer service agents, medical staff, etc. and comprise of 80% of global workforce. Microsoft 365 F1 aims to provide purpose-built capabilities that help foster firstline culture and community, train and upskill employees, digitize business process, deliver real-time expertise, and minimize risk and cost.

Microsoft also announced the upcoming Microsoft 365–powered devices, including new commercial Windows 10 S devices from HP, Lenovo, Fujitsu, starting at $275 and available starting later this year. These devices will enable self-service deployment, simplified management, and a reduced total cost of ownership for businesses.

Microsoft also announced new Microsoft 365 capabilities to unlock employees’ creativity, fuel teamwork, and to provide IT a simpler way to manage users, devices, applications, and data.

Microsoft offers Windows 10 S, Minecraft for Education, Office 365 for Education for new PCs

Microsoft offers Windows 10 S, Minecraft for Education, Office 365 for Education for new PCs

www.office.com/setup Blogs: Microsoft is looking to empower educators with their newly announced Windows 10 S, and it looks like they want to get it into as many teacher’s hands as possible right off the bat. During the media event today, Terry Myerson shared that it’s going to be easier for classrooms to implement Windows 10 S than any other Windows 10 version.

www.office.com/setup Blogs: Partners will be offering these new Windows 10 education PCs starting at $189. Furthermore, these devices will come with a free subscription to Minecraft: Education Edition. With the Microsoft Teams collaborative software, they’ll also have access to Microsoft Office 365 for Education. If schools aren’t able to afford these cheaper new devices, any Windows Pro PCs in schools will also be offered Windows 10 S for free.

On top of all the news, Microsoft Intune for Education has also been released publicly today.

The rollout of Windows 10 S will be coming this Summer, ready to prepare for the next calendar school year.