Microsoft 2005 Annual Report Download - page 9

BUSINESS DESCRIPTION (CONTINUED)
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The next generation of the Windows operating system, Windows Vista, is currently under development. This development
phase represents a significant investment for the Client business and we expect that this will result in the most manageable and
powerful operating system product ever released by Microsoft for both our business and consumer markets. While features and
functions have not been finalized, Windows Vista will include significant advances in security, digital media, user interfaces, and
other areas that are expected to enhance the user and developer experience. We are targeting broad availability of this
operating system for the first half of fiscal year 2007.
Server and Tools. The Server and Tools segment develops and markets Windows Server System products, including Windows
Server operating systems. Windows Server System is integrated server infrastructure software that is designed to support end-
to-end software applications and tools built on the Windows Server 2003 operating system. In addition, the segment provides
information to developers and information technology (IT) professionals about the extended Microsoft platform through a variety
of content offerings, such as Web-based training. Through this segment, we offer a broad range of consulting services for
advanced technology requirements, including custom solution services, enterprise application planning, architecture and design
services, and proof-of-concept services. We also provide product support services to corporations and other large customers.
The Server and Tools segment also includes: developer tools, training, and certification; Microsoft Press; the Enterprise and
Partner Group, which is responsible for sales, partner management and partner programs for the enterprise business; and the
Public Sector sales and marketing organization.
Products in Server and Tools provide a wide range of capabilities that include messaging and collaboration, database
management, e-commerce, and mobile information access. These products are designed to work seamlessly with one another
and with advances in applications and development tools. This architecture is designed to help simplify the design,
development, deployment, and management of software applications and tools so that customers can focus less on integrating
systems and training users, and more on adding strategic value to their businesses. Windows Server System also readily
integrates with customers’ existing non-Microsoft systems, through support for open standards such as HTTP and XML, and
through on-going support for XML-based Web services.
Windows Server delivers a platform for powering connected applications, networks, and Web services from the work group to
the data center. SQL Server is a relational database management system for rapidly delivering the next generation of scalable e-
commerce, line-of-business, and data-warehousing solutions. Exchange Server, a business tool for e-mail collaboration and
messaging, enables information workers to gain access to critical business communications. Systems Management Server
(SMS) provides a comprehensive solution for change and configuration management of information systems that enables
organizations to provide relevant software and updates to users quickly and cost-effectively. Small Business Server helps small
businesses do more with a business server solution that includes messaging and collaboration, security-enhanced Internet
access, protected data storage, reliable printing, the ability to run line-of-business applications, and faxing. BizTalk Server is
designed to help customers efficiently and effectively integrate systems, employees, and trading partners through manageable
business processes, enabling them to automate and orchestrate interactions in a flexible and highly automated manner.
Developer tools focus on coordinating the overall programming model for the client and server and creating tools for developing
Microsoft .NET-connected applications and services. During fiscal year 2006, Server and Tools plans to release major updates
of several products, including new versions of SQL Server, Visual Studio and BizTalk Server, and the beta version of the next
generation of Windows Server.
Server and Tools uses multiple distribution channels including pre-installed OEM versions, licenses through partners, and
licenses directly to end customers. The licenses are sold both as one-time licenses and as multi-year licenses depending upon
the needs of different customer segments. Approximately 50% of Server revenue comes from multi-year licensing agreements,
40% is purchased through fully packaged product and transactional volume licensing programs, and 10% comes from licenses
sold to OEMs.
Information Worker. The Information Worker segment is responsible for developing and delivering software solutions that
enable organizations to meet core objectives by empowering their people to transform information into impact. These solutions
are an important part of an organization’s application architecture, enabling them to respond more effectively to new
opportunities and challenges through more effective use of their people and information.
The Information Worker segment has expanded its focus beyond personal productivity to look at how people interact with the
flow of information in an organization. Doing so has provided the opportunity to deliver more value to small, medium, and large
organizations and in home, student, and teacher segments through software and software-based services.
The most recent wave of Microsoft Office offerings, released to market in the first half of fiscal year 2004, represents an
evolution from a suite of personal productivity products to a more comprehensive and integrated system of programs, servers,
and services designed to increase personal, team, and organization productivity. The Microsoft Office system includes the