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Windows to Break the Billion PC Mark

A billion computers will be running Windows worldwide by the end of the current fiscal year, which ends next June 30, company CEO Steve Ballmer told the audience Thursday at Microsoft's annual financial analysts meeting.

The company reported last week it had broken the $50 billion mark in revenues during fiscal 2007.

Besides reaching an installed base of one billion Windows operating systems, the company is also hitting several other important milestones. For instance, the company has doubled profits and nearly doubled revenues in just the past five years, Ballmer pointed out. In that time, Microsoft has acquired 80 companies, he added.

The company also revealed it has sold 60 million units of Windows Vista to date and that it also sold $800 million worth of Office SharePoint Server licenses during fiscal 2007.

Meanwhile, Jeff Raikes, president of Microsoft's Business Division, announced that the company has released to manufacturing (RTM) both Office Communications Server 2007 and Office Communicator 2007. In addition, the company's Business Solutions group, which includes the Microsoft Dynamics products, is now a billion-dollar business, Raikes said.

Microsoft also disclosed that the company is starting an applied research organization that will focus on accelerating search and advertising technology development.

The group, dubbed the Internet Services Research Center (ISRC), will be headed by Harry Shum, who has been promoted to corporate vice president. Formerly a member of Microsoft Research, Shum became chief scientist for the search and advertising platform group earlier this year.

That is just one of many moves the company is making to strengthen its "software plus services" initiative. For instance, Kevin Johnson, president of the Platform and Services Division, told the analysts that Microsoft today agreed to acquire AdECN, an advertising exchange platform company.

In addition, Ballmer said that ad revenues from its online operations grew by 21 percent during fiscal 2007. "We're the third largest ad seller on the Internet today," Ballmer added.

And, in fact, the company forecasts continued growth.

For instance, 150 million or more PCs will ship in the next 12 months, Raikes told the audience. The obvious implication is that Windows will ship on those PCs.

Johnson said that the company now has 380 million unique Live IDs, representing users who use their Live ID (formerly Microsoft Passport) every month. That's a 20 percent growth rate.

"The next release of Windows Live will be a single suite of user services that will be coming out this fall," Johnson also told the analysts, saying the suite aims to be "the must-have free upgrade to the Windows experience."

However, as the company has had to widen its offerings - from adding business intelligence products to software plus services to selling hardware devices that use its software - the company is having to learn to embrace multiple business models simultaneously, Ballmer said.

In order to achieve its goals of continued growth, Microsoft has continued its hiring spree as well. The company topped its fiscal 2006 record of 10,000 new hires by bringing on board an additional 12,800 in fiscal 2007, Ballmer told the audience.

COO Kevin Turner said that fiscal 2008 is also the year that the majority of corporate customers will begin large-scale deployments of Windows Vista. The company also plans to ship several other key corporate products, including Windows Server 2008, SQL Server 2008, and Visual Studio 2008, during the current fiscal year.

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