Microsoft 2012 Annual Report Download - page 2

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TO OUR SHAREHOLDERS, CUSTOMERS, PARTNERS AND EMPLOYEES:
Last year was a big year – we delivered strong results, launched fantastic new products and services, and positioned
Microsoft for an incredible future.
For fiscal year 2012, revenue grew to a record $73.7 billion. We also maintained strong cost discipline resulting in cash
flow from operations of $31.6 billion, an increase of 17 percent from the prior year. In addition, we returned $10.7 billion to
shareholders through stock buybacks and dividends.
We delivered these results while preparing a pipeline of new and updated products that will launch in the year ahead. To
best understand what we are about to deliver and what we’re building toward, it’s important to recognize a fundamental
shift underway in our business and the areas of technology that we believe will drive the greatest opportunity in the future.
Our Business: Devices and Services
Last year in this letter I said that over time, the full value of our software will be seen and felt in how people use devices
and services at work and in their personal lives. This is a significant shift, both in what we do and how we see ourselves –
as a devices and services company. It impacts how we run the company, how we develop new experiences, and how we
take products to market for both consumers and businesses. The work we have accomplished in the past year and the
roadmap in front of us brings this to life.
Devices With End-User Services
We will continue to work with a vast ecosystem of partners to deliver a broad spectrum of Windows PCs, tablets and
phones. We do this because our customers want great choices and we believe there is no way one size suits over 1.3
billion Windows users around the world. There will be times when we build specific devices for specific purposes, as we
have chosen to do with Xbox and the recently announced Microsoft Surface. In all our work with partners and on our own
devices, we will focus relentlessly on delivering delightful, seamless experiences across hardware, software and services.
This means as we, with our partners, develop new Windows devices we’ll build in services people want. Further, as we
develop and update our consumer services, we’ll do so in ways that take full advantage of hardware advances, that
complement one another and that unify all the devices people use daily. So right out of the box, a customer will get a
stunning device that is connected to unique communications, productivity and entertainment services from Microsoft as
well as access to great services and applications from our partners and developers around the world.
A great example of this shift is Windows 8. Windows 8 will come to market Oct. 26, 2012, with beautiful hardware that will
light up with our consumer cloud services. Windows 8 unites the light, thin and fun aspects of a tablet with the power of a
PC. It’s beautiful, it’s functional, and it’s perfect for both personal and professional use. Xbox Music, Video, Games and
SmartGlass apps make it possible to select a movie from a PC, start playing it on the TV, and finish watching it on a
phone. SkyDrive, our cloud storage solution, effortlessly connects content across a user’s devices. Bing’s powerful search
technologies in Windows 8 will help customers get more done. Skype has a beautiful new Windows 8 app and connects
directly into the new Office.
Office, too, is taking a major leap forward. The new Office was designed from the ground up for Windows 8 and takes full
advantage of new mobile form factors with touch and pen capabilities. It unlocks new experiences for reading, note taking,
meetings and communications and brings social directly into productivity and collaboration scenarios. The combination of
a Windows 8 tablet with OneNote and SkyDrive has truly revolutionized how to take notes, annotate documents and share
information. The ultimate experience with the new Office for both consumers and businesses will come when it is paired
with a Windows 8 device and delivered as a cloud subscription service with Office 365.