Microsoft 2005 Annual Report Download - page 10

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Microsoft Office 2003 Editions, which include (depending upon the edition): Microsoft Office Outlook 2003; Microsoft Office
Excel 2003; Microsoft Office PowerPoint 2003; Microsoft Office Word 2003; Microsoft Office Access 2003; Microsoft Office
InfoPath 2003; and Microsoft Office Publisher 2003. Other products in the Microsoft Office System include: Microsoft Office
Visio 2003; Microsoft Office Project 2003; Microsoft Office Project Server 2003; Microsoft Office OneNote 2003; Microsoft
Office FrontPage 2003; Microsoft Office Live Communications Server 2005; Microsoft Office Live Meeting 2005; Microsoft
Office Communicator 2005; and Microsoft Office SharePoint Portal Server 2003. The Information Worker business also offers
Virtual Office, an ad hoc, peer-to-peer collaboration solution.
Historically, approximately 40% of Information Worker billed revenue comes from multi-year license agreements with large
enterprises. Revenues from these licenses generally depend upon the number of information workers in a licensed enterprise.
Therefore, our revenue from this category of agreements is relatively independent of the number of PCs sold in a given year, but
rather depends on the number of employees in a given enterprise. Consequently, general employment levels, particularly in
North America and Europe, Middle East, and Africa, significantly affect Information Worker revenue. Approximately 40% of
Information Worker revenue comes from new licenses acquired through fully packaged product and transactional volume
licensing programs to individual consumers and enterprises of all sizes. Most of this revenue is sensitive to information
technology budgets, which often depend on general economic conditions. The remaining approximately 20% of Information
Worker revenue is from licenses to OEMs for new PCs and through sales of retail packaged products and is affected by the
relative level of PC shipments.
The Information Worker segment releases most products in a “wave” approach, with a major release every 24-36 months.
New products and investment areas will occasionally fall outside of the wave cycle. In fiscal year 2006, the Information Worker
segment will release solutions outside of the next wave of products in business intelligence, small business accounting, and real
time communications, while also preparing the sales team, partners, and customers for the next full wave of products, code
named Office 12, due for release during the first half of fiscal year 2007.
Microsoft Business Solutions. The Microsoft Business Solutions segment is responsible for developing and marketing offerings
to manage financial, customer relationship and supply chain management functions for small and midsize businesses, large
organizations and divisions of global enterprises. Delivered through a global network of channel partners providing vertical
solutions and specialized services, these integrated, adaptable business solutions work like and with familiar Microsoft software
to streamline processes across an entire business. Microsoft Business Solutions now includes the Small and Mid-Market
Solutions & Partners (SMS&P) organization, which previously had been included in Information Worker. SMS&P supports small
and mid-market customers for all Microsoft products and services.
Microsoft Business Solutions focuses on providing continuous innovation that integrates with solutions across Microsoft
Office, Windows Server System and other Microsoft tools and technologies, and that provides rich functionality with high
adaptability at lower costs. The solutions are designed to be easy to use and empower people to be more productive. As a result
of our platform approach, the business solutions category enables a broad ecosystem of vertical partners and independent
software vendors that offer tailored functionality to our target customers.
The segment consists of Line of Business Solutions to manage financial management and supply chain management
functions (Microsoft Great Plains, Microsoft Navision, Microsoft Solomon and Microsoft Axapta); solutions to manage customer
relationships (Microsoft CRM); vertical solutions for small and midsized retailers (Microsoft Point of Sale and Microsoft Retail
Management System); and other business applications and services including the Microsoft Partner Program. The Business
Solutions R&D team also develops Office Small Business Accounting and Business Contact Manager for Outlook, which are
marketed by Information Worker.
In fiscal year 2006, Microsoft Business Solutions will release upgrades and/or updates to its core line of business solutions
including releases for Microsoft CRM, Microsoft Axapta, Microsoft Great Plains, Microsoft Navision and Microsoft Solomon.
These releases will focus on user experience, web services, contextual business intelligence, and portals that interoperate with
other Microsoft technologies.
MSN. MSN is responsible for delivering online services that seek to empower users by bringing them closer to the people and
information that matter most to them. MSN provides personal communications services, such as e-mail and instant messaging,
and information services such as MSN Search and the MSN portals and channels around the world. MSN manages many of its
own properties, including health, autos, and shopping. MSN also creates alliances with leading third parties for many channels,
including top partners like MSNBC.com, a joint venture between NBC Universal and Microsoft; Foxsports.com, a property of Fox
Entertainment Group; Expedia.com; Match.com, an operating unit of InterActiveCorp; and CareerBuilder.com. MSN provides a
variety of paid solutions including MSN Internet Access, Premium Web Services (consisting of MSN Internet Software
Subscription, MSN Hotmail Plus, MSN Bill Pay, and MSN Radio Plus), and MSN Mobile services.