Microsoft 2014 Annual Report Download - page 10

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9
D&C Other
The principal products and services provided by the D&C Other segment are: Resale, including the Windows Store, Xbox
Live transactions, and the Windows Phone Store; search advertising; display advertising; Office 365 Consumer,
comprising Office 365 Home and Office 365 Personal; Studios, comprising first-party video games; and our retail stores.
Windows Store and Windows Phone Store are online application marketplaces that are designed to benefit our
developers and partner ecosystems by providing access to a large customer base and benefit users by providing
centralized access to certified applications. Xbox Live transactions consist of online entertainment content, such as
games, music, movies, and TV shows, accessible on Xbox consoles and other devices.
Search and display advertising includes Bing, Bing Ads, MSN, Windows Services, and Xbox ads. We are the exclusive
algorithmic and paid search platform for Yahoo! websites worldwide. We have completed the Yahoo! worldwide
algorithmic transition and the paid search transition in the U.S. and planned international markets.
Office 365 Consumer is designed to increase personal productivity through a range of Microsoft Office programs and
services delivered across multiple platforms via the cloud.
Studios designs and markets games for Xbox consoles, Windows-enabled devices, and online. Growth depends on our
ability to attract new users and increase engagement by developing a deep library of content which consumers seek.
Competition
We face competition for our Resale products and services from various online marketplaces, including those operated by
Amazon, Apple, and Google.
Our search and display advertising business competes with Google and a wide array of websites, social platforms like
Facebook, and portals like Yahoo! that provide content and online offerings to end users. Our success depends on our
ability to attract new users, understand intent, and match intent with relevant content and advertiser offerings. We believe
we can attract new users by continuing to offer new and compelling products and services. We differentiate our offerings
by providing a broad selection of content that helps users make faster, informed decisions, and take action more quickly
by providing relevant search results, expanded search services, and deeply-integrated social recommendations.
Competitors to Office 365 Consumer are the same as those discussed above for Office Consumer.
Competitors to Studios are the same as those discussed above for our Xbox gaming and entertainment business, as well
as game studios like Electronic Arts and Activision Blizzard.
Commercial
Our Commercial segments develop, market, and support software and services designed to increase individual, team,
and organization productivity and efficiency, and to simplify everyday tasks through seamless operations across the user’s
hardware and software. Commercial is made up of the Commercial Licensing and Commercial Other segments.
Commercial Licensing
The principal products and services provided by the Commercial Licensing segment are: server products, including
Windows Server, Microsoft SQL Server, Visual Studio, System Center, and related Client Access Licenses (“CAL”);
Windows Embedded; volume licensing of the Windows operating system, excluding academic (“Windows Commercial”);
Microsoft Office for business, including Office, Exchange, SharePoint, Lync, and related CAL (“Office Commercial”);
Skype; and Microsoft Dynamics business solutions, excluding Dynamics CRM Online.
Our server products are designed to make information technology professionals and developers and their systems more
productive and efficient. 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. We also license standalone and software development lifecycle tools for software architects, developers,
testers, and project managers. Revenue comes from product revenue, including purchases through volume licensing
programs, licenses sold to OEMs, and retail packaged product. CAL provide access rights to certain server and Office
products, including Windows Server, Microsoft SQL Server, Exchange, SharePoint, and Lync. CAL revenue is reported
along with the associated server or Office product.