Microsoft profit numbers say don’t write off Redmond yet
April 4, 2014 | 6:22 pm
All those Microsoft knockers – me included – who’ve held back from embracing Windows 8 and shunned Windows Phone OS phones may want to eat their words, or at least, nibble around their edges. Because according to the chart below from Statista, based on Gartner figures, Microsoft was far and away the world’s leading software vendor by revenue in 2013, with total income of $65.7 billion, besting second and third placed rivals Oracle and IBM by over $30 billion.
For comparison, Apple generated revenue of $171 billion in its 2013 financial year. Google’s 2013 revenue was $59.82 billion. With these kind of numbers, Microsoft is clearly still in the right revenue league to be able to field a convincing alternative proposition to its rivals. And according to Ed Bott’s recent breakdowns of Microsoft’s revenue structure over at ZDNet, nearly half of its income is derived from commercial licenses, which are unlikely to be eroded in the near future – unless business customers switch to Android or Chrome OS in a big way.
Apple, meanwhile, “is a hardware company first and foremost,” as Bott says, with software and services (including iTunes) contributing only 9 percent to its revenue mix. And Microsoft can continue to make money from software it puts out to run on Apple devices, including Office for iOS, while Apple is obviously deriving little from the iTunes and other software packages it puts out to run on Windows and other platforms. Hardware dependency makes it critically important for Apple to maintain the hardware lead – essentially, it’s a one-trick pony. And those can easily go lame or fall behind when they throw a shoe. Microsoft, meanwhile, may have far greater staying power, with greater diversification across platforms and product lines, even if they have less revenue, and arguably far less charisma, than Apple.