Microsoft 2013 Annual Report Download - page 9

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Windows Services software and applications, including SkyDrive and Outlook.com, compete with similar software and
service products from Apple, Google, Yahoo!, and a wide array of websites and portals that provide communication and
sharing tools and services.
Surface Pro and RT devices and our PC accessories face competition from computer, tablet, and other hardware
manufacturers, many of which are also current or potential partners and customers.
Server and Tools
Server and Tools develops and markets server software, software developer tools, cloud-based services, and solutions
that are designed to make information technology professionals and developers and their systems more productive and
efficient. We offer our customers both on-premise software and cloud-based offerings, bringing together the benefits of
traditional on-site offerings with cloud-based services. Server software is integrated server infrastructure and middleware
designed to support software applications built on the Windows Server operating system. This includes the server
platform, database, business intelligence, storage, management and operations, virtualization, service-oriented
architecture platform, security and identity software. Server and Tools also builds standalone and software development
lifecycle tools for software architects, developers, testers, and project managers. Server offerings can be run on-site, in a
partner-hosted environment, or in a Microsoft-hosted environment.
Our cloud-based services comprise a scalable operating system with computing, storage, database, and management,
along with comprehensive cloud solutions, from which customers can build, deploy, and manage enterprise workloads
and web applications. These services also include a platform that helps developers build and connect applications and
services in the cloud or on premise. Our goal is to enable customers to devote more resources to development and use of
applications that benefit their businesses, rather than managing on-premises hardware and software.
Windows Embedded extends the power of Windows and the cloud to intelligent systems by delivering specialized
operating systems, tools, and services. In addition, Server and Tools offers a broad range of enterprise consulting and
product support services (“Enterprise Services”) that assist customers in developing, deploying, and managing Microsoft
server and desktop solutions. Server and Tools also provides training and certification to developers and information
technology professionals for our Server and Tools, Microsoft Business Division, and Windows Division products and
services.
Approximately 80% of Server and Tools revenue comes from product revenue, including purchases through volume
licensing programs, licenses sold to OEMs, and retail packaged product, while the remainder comes from Enterprise
Services.
Principal Products and Services: Windows Server operating systems; Windows Azure; Microsoft SQL Server;
Windows Intune; Windows Embedded; Visual Studio; System Center products; Microsoft Consulting Services; and
Premier product support services.
Competition
Our server operating system products face competition from a wide variety of server operating systems and applications
offered by companies with a range of market approaches. Vertically integrated computer manufacturers such as Hewlett-
Packard, IBM, and Oracle offer their own versions of the Unix operating system preinstalled on server hardware. Nearly
all computer manufacturers offer server hardware for the Linux operating system and many contribute to Linux operating
system development. The competitive position of Linux has also benefited from the large number of compatible
applications now produced by many commercial and non-commercial software developers. A number of companies, such
as Red Hat, supply versions of Linux.
We compete to provide enterprise-wide computing solutions and point solutions with numerous commercial software
vendors that offer solutions and middleware technology platforms, software applications for connectivity (both Internet and
intranet), security, hosting, database, and e-business servers. IBM and Oracle lead a group of