Here's how much money Microsoft's three new businesses are making
The company is moving from five business segments to three.
Basically, the new Productivity and Business Processes segment corresponds with Office; Intelligent Cloud corresponds with Windows Server and other infrastructure products; and More Personal Productivity corresponds with Windows. Other businesses that used to be reported on a standalone basis, like online services and the Xbox, have now been lumped into those three big categories.
Here's how the three business segments fared in terms of revenue and operating profit (loss) for the last two fiscal years. The "Corporate and Other" segment includes broad-based expenses that can't be put into a single business unit, like legal judgments and general and administrative costs - and the $7.6 billion write-down from the Nokia acquisition, which happened at the end of its last fiscal year.
| (In millions) | |||
| Year Ended June 30, | 2015 | 2014 | |
| Revenue | |||
| Productivity and Business Processes | 26,431 | 26,972 | |
| Intelligent Cloud | 23,715 | 21,732 | |
| More Personal Computing | 42,953 | 38,407 | |
| Corporate and Other | 481 | (278 | ) |
| Total revenue | 93,580 | 86,833 | |
| (In millions) | |||
| Year Ended June 30, | 2015 | 2014 | |
| Operating income (loss) | |||
| Productivity and Business Processes | 13,087 | 13,940 | |
| Intelligent Cloud | 9,871 | 8,443 | |
| More Personal Computing | 5,179 | 6,150 | |
| Corporate and Other | (9,976) | (774 | ) |
| Total operating income (loss) | 18,161 | 27,759 |
You can really see how all of Microsoft's current growth is being driven by its enterprise business - Windows Server, SQL Server, the Azure cloud, and so on. Revenue and profits from the Office business declined between its fiscal 2014 and 2015 years, and profits from the Windows business dropped quite steeply.
In detail, here's the breakdown of the new segments:
Productivity and Business Processes
Our Productivity and Business Processes segment consists of products and services in our portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. This segment primarily comprises:
- Office Commercial, including volume licensing and subscriptions to Office 365 Commercial, for products and services such as Microsoft Office, Exchange, SharePoint, and Skype for Business, and related Client Access Licenses ("CALs").
- Office Consumer, including Office sold through retail or through an Office 365 Consumer subscription, and revenue from Outlook.com, OneDrive, and consumer Skype services.
- Microsoft Dynamics business solutions, including Dynamics ERP products, Dynamics CRM on-premises, and Dynamics CRM Online ("Microsoft Dynamics").
Intelligent Cloud
Our Intelligent Cloud segment consists of our public, private, and hybrid server products and services that can power modern business. This segment primarily comprises:
- Server products and services, including Windows Server, Microsoft SQL Server, Visual Studio, System Center, and related CALs, as well as Microsoft Azure.
- Enterprise Services, including Premier Support Services and Microsoft Consulting Services.
More Personal Computing
Our More Personal Computing segment consists of products and services geared towards harmonizing the interests of end users, developers, and IT professionals across screens of all sizes. This segment primarily comprises:
- Windows, including Windows OEM licensing ("Windows OEM") and other non-volume licensing of the Windows operating system, volume licensing of the Windows operating system ("Windows VL"), patent licensing, Windows Embedded, MSN display advertising, and Windows Phone licensing.
- Devices, including phones, Surface, and Microsoft PC accessories.
- Gaming, including Xbox hardware; Xbox Live, comprising transactions, subscriptions, and advertising; first-party video games; and second- and third-party video game royalties.
- Search advertising.