Microsoft 2008 Annual Report Download - page 4

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PAGE 3
The availability of Hyper-V is just one of the ways we made significant strides toward realizing our vision for
dynamic IT systems that have the flexibility and intelligence to automatically adjust to changing business
conditions. New Microsoft Systems Center products released in fiscal 2008 are helping IT organizations optimize
business processes and improve the delivery of computing services.
We also continue to focus on the companywide effort to embrace software plus services and deliver
breakthroughs that combine the power of desktop and server software with the flexibility of Internet-based
services. In fiscal 2008, we made significant improvements to our core search technology through advances in
our search algorithms, better query refinement, and enhanced understanding of query intent. New vertical search
categories improve search results for commerce, entertainment, shopping, local search, and health queries. Live
Search for Windows Mobile added new features for mobile users, such as voice input and dynamic rerouting of
driving directions based on real-time traffic information. Microsoft Search Server Express 2008 optimizes search
for business data.
Our efforts in software plus services extend far beyond search. In fiscal 2008 we announced a new set of Online
Services that provide mission-critical services-enabled products for organizations with advanced IT capabilities.
Our Online Services – including Microsoft Exchange Online, Microsoft SharePoint Online, Microsoft Office
Communications Online, and Microsoft Dynamics CRM Online – provide customers with the flexibility to deploy
and manage business application internally, or have them hosted by Microsoft partners or by Microsoft.
To help developers and Web designers create the next generation of experiences and applications for the Web
and for Windows, we also rolled out Microsoft Expression 2 and released a beta version of Microsoft Silverlight 2
in 2008.
Other innovative products introduced in fiscal 2008 included Microsoft Windows HPC Server 2008, a server
operating system designed for the fast-growing high-performance computing market, and WorldWide Telescope,
a Web application that enables people to explore the universe through their computers.
Emerging Opportunities and Markets
Fiscal 2008 saw strong growth across our businesses as we continue to focus on important new opportunities in a
wide range of markets. For example, revenue from our Entertainment and Devices Division grew by 34 percent as
investments in consumer technologies yielded strong benefits. For the year, Entertainment and Devices operating
revenue reached $8.1 billion, thanks to excellent momentum from the Xbox 360 console, which has sold more
than 19 million units, and Xbox Live, which has more than 12 million members. “Halo 3” topped $300 million in
sales in just its first week of availability.
We see important opportunities in the digitization of communications, and we introduced new unified
communications software including Microsoft Office Communications Server 2007, Microsoft Office
Communicator 2007, and Microsoft Live Meeting to help companies streamline workplace communications. We
launched Microsoft Office PerformancePoint Server 2007, which delivers new technologies that make business
intelligence accessible and easy to use for people at every level of an organization.
Healthcare is another important opportunity, and in fiscal 2008 we introduced Microsoft HealthVault and the
Microsoft Amalga Family of Health Enterprise Systems. HealthVault provides a platform for services and
applications that will enable people to better manage their health information. Amalga is a portfolio of enterprise-
class solutions that spans clinical, operational, and financial functions within healthcare. Together, these products
position Microsoft as a leader in the market for digital technology innovations that improve healthcare delivery.
Online services and online advertising represent enormous opportunities for the company as well, and we
continue to invest in research and development as we work to reinvent search through innovations in the user
experience and in business models, with initiatives such as Microsoft Live Search cashback, which offers ad-
funded rebates to consumers. During fiscal 2008, the acquisition of aQuantive and improvements to our
advertiser and publisher solutions resulted in a 31 percent increase in online advertising revenue.
One of our great strengths is the global nature of our business, and we saw significant growth in a number of key
emerging markets.In the BRIC nations (Brazil,Russia,India, and China), revenue was up 54 percent. In addition to