Microsoft 2009 Annual Report Download - page 11

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PAGE 11
Products and Services: Bing; Microsoft adCenter/adExpert; Microsoft Media Network (MMN); MSN portals,
channels, and mobile services; Windows Live suite of applications and mobile services; Atlas online tools for
advertisers and publishers; MSN Premium Web Services (consisting of MSN Internet Software Subscription,
MSN Hotmail Plus, and MSN Software Services); and Razorfish media agency services.
Competition
OSB competes with AOL, Google, Yahoo!, and a wide array of Web sites and portals that provide content and online
offerings of all types to end users. We compete with these organizations to provide advertising opportunities for
merchants. The Internet advertising industry has grown significantly over the past several years, and we anticipate
that this trend will continue long-term. Competitors are aggressively developing Internet offerings that seek to
provide more effective ways of connecting advertisers with audiences through enhanced functionality in information
services such as Internet search, improvements in communication services, and improved advertising infrastructure
and support services. We believe our search engine, Bing, helps users make faster, more informed decisions by
providing more relevant search results, expanded search services, and a broader selection of content. We have also
enhanced the user interface to bring a richer search experience, which we believe will differentiate us from our
competitors. To support the growth of our advertising business, we also are investing in improving the scale of our
advertising platform, seamless integration of content and offerings to the mobile platform, rich and relevant content
for wider consumer reach, enhanced communication services, technology, and operations, along with sustained
sales efforts. We will continue to introduce new products and services that are aimed at attracting additional users
through improvements in the user online experience. We believe that we can compete effectively across the breadth
of our Internet services by providing users with software innovation in the form of information and communication
services that help them find and use the information and experiences they want online and by providing merchants
with effective advertising results through improved systems and sales support.
Microsoft Business Division
Microsoft Business Division (“MBD”) offerings consist of the Microsoft Office system and Microsoft Dynamics
business solutions. Microsoft Office system products are designed to increase personal, team, and organization
productivity through a range of programs, services, and software solutions. Growth of revenue from the Microsoft
Office system offerings, which generate over 90% of MBD revenue, depends on our ability to add value to the core
Office product set and to continue to expand our product offerings in other information worker areas such as content
management, enterprise search, collaboration, unified communications, and business intelligence. Microsoft
Dynamics products provide business solutions for financial management, customer relationship management,
supply chain management, and analytics applications for small and mid-size businesses, large organizations, and
divisions of global enterprises.
We evaluate MBD results based upon the nature of the end user in two primary parts: business revenue, which
includes Microsoft Office system revenue generated through volume licensing agreements and Microsoft Dynamics
revenue; and consumer revenue, which includes revenue from retail packaged product sales and OEM
revenue. Approximately 80% of MBD revenue is generated from sales to businesses. Revenue from this category
generally depends upon the number of information workers in a licensed enterprise and is therefore relatively
independent of the number of PCs sold in a given year. Approximately 20% of MBD revenue is derived from sales to
consumers. Most of this revenue is generated from new licenses acquired through fully packaged products and
licenses sold through OEMs for new PCs and is generally affected by the level of PC shipments and product
launches.
Products: Microsoft Office; Microsoft Office Project; Microsoft Office Visio; Microsoft Office SharePoint
Server; FAST ESP; Microsoft Exchange Server; Microsoft Exchange Hosted Services; Microsoft Office Live
Meeting; Microsoft Office Communications Server; Microsoft Office Communicator; Microsoft Tellme Service;
Microsoft Dynamics ERP products including AX, NAV, GP, SL, Retail Management System, and Point of Sale;
Microsoft Dynamics CRM; and Microsoft Dynamics CRM Online.