Status Report on That other OS

I think M$ would rather keep this one quiet. That other OS is showing little growth in the latest quarterly report. The illusion that M$ has the answers for IT is all but gone. After the client division declines, whither goes the other tentacles of their nightmarish cash-cow?

Details:

  • Unearned revenue for client division = $1.453 billion “Unearned revenue from volume licensing programs represents customer billings for multi-year licensing arrangements paid for either at inception of the agreement or annually at the beginning of each billing coverage period and accounted for as subscriptions with revenue recognized ratably over the billing coverage period.”
  • Total revenue for the client division was $4.606 billion up 4% over last year’s quarter
  • Revenue – Unearned Revenue = $3.153 billion
  • This quarter, last year, Revenue – Unearned Revenue was $4.393 – $1.370 = $3.023 billion

So, even without the slight-of-hand involving drawing money from the slush-fund of unearned revenue, revenue for the client division is up 4%. What will they do when the slush-fund runs out?
“The following table outlines the expected future recognition of unearned revenue as of March 31, 2012:

(In millions)
Three Months Ending,
June 30, 2012 $6,217
September 30, 2012 $3,921
December 31, 2012 $2,726
March 31, 2013 $1,065
Thereafter $1,262
Total $15,191

M$ is getting twice the growth in licence revenues that IDC is seeing in PC shipments by OEMs. How they did that with a shortage of hard drives is beyond me. M$ says they had a higher attach-rate. Five years ago, when XP was old, M$ reported revenue for “client” of $5.279 billion, with unearned revenue of $2.684 billion. That’s incredibly slow growth for a bully like M$.

UPDATE I am not the only one surprised. The BBC reports that people were expecting a 4% decline in sales of that other OS…

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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36 Responses to Status Report on That other OS

  1. Writing of educational games for young children, Phenom wrote, “where are exactly these lot of games for Linux?”

    Check out:

  2. Phenom says:

    Elementary kids should have a lot of games on their PCs

    Hm-m, where are exactly these lot of games for Linux? Last time I checked, the games are mostly exclusively for consoles and Windows PCs. There are certainly educational games / applications for Android, but they can’t quite run on a desktop Linux distribution, you know.

  3. oiaohm says:

    Robert Pogson when a house has 1 machine the 10 percent games is normally the big driving force in OS section.

    PC is not targeted at one thing.

    Also here in Australia entry level accountancy is a problem for business so ripping the market to shreds.

  4. oiaohm wrote, “Most PC owners want to play games that is the simple fact of the reality.”

    There are a bunch of categories of users/usage of PCs and games are only one. Teenagers, young adults and men often play games but the PCs intended for gaming-only are a rather small niche, not more than 10%. A huge category is multimedia and “social” Internet is another. The major areas of use browser and office stuff can be done very well with GNU/Linux unless some specialized app is involved. Many businesses like to buy some package that fits their business but there still is a huge slug that the ordinary GNU/Linux desktop can satisfy. Migrations usually find ~80% of users of PCs can just find equivalent apps (browser, office suite, media player) and use GNU/Linux.

    My wife uses a PC a lot and is totally non-techie. She uses Google Chrome browser, Gwenview image viewer, “file-manager”, LibreOffice (mostly writer and calc), and very little else. She does have a few games for the grand daughter. GNU/Linux has a surplus of applications for that usage-pattern. Most of her applications are web-applications: FaceBook, Gmail, Google search and some news sites. She does view/print some PDFs. I guess xpdf does what she needs. Several GNU/Linux distros would meet her needs out of the box. I customized her system to XFCE4 because she has one machine that has only 512 MB RAM and the heavy-weight distros make it swap. She makes it swap just with the browser…

    I have worked a lot in schools. Elementary kids should have a lot of games on their PCs. High school students usually have no educational purpose for them generally although there might be exceptional kids or special courses that might use them effectively. High school kids normally are learning to use IT for all kinds of purposes and they can often get their gaming at home. So GNU/Linux works well in schools. All kinds of diverse organizations have adopted GNU/Linux for work and games are usually a low priority.

  5. oiaohm says:

    ernest Linux advantage to cluster makes sense to movie makers as well.

    There are quite a few markets where Linux does really really well.

    It just has not been the most popular sections of the desktop market. Mostly games. Lack of games turn a lot off. Most PC owners want to play games that is the simple fact of the reality.

    Next is business.

    Also Phenom in the criss MS grew by cutting staff and taking on debt. Redhat grew in the criss MS failed in the criss. This is the reality of it.

  6. kozmcrae says:

    ernest wrote:

    “Have you considered your own compulsive need to cheat and lie?”

    There’s no need to cheat and lie when dealing with the Cult of Microsoft. Besides, cheating and lying would not bring any real gains.

    The Cult of Microsoft fall all over themselves defending Microsoft using the same words, phrases, logic and tactics. There’s no creativity in their work. Basically, when you’ve seen one, you’ve seen them all. Really. There are just different temperaments.

    I’ve dealt with you before ernest. You bring nothing new to the discussion here. Just more verbiage.

  7. ernest says:

    Are you actually saying that “many of the advantages of GNU/Linux” are only relevant to “system administrators”?

    Apologies if you missed that salient point.

  8. Nope. The advantages of GNU/Linux are open to all even M$ and its “partners”. Some realize the advantages and embrace GNU/Linux. Some do not. It’s all about being human. One can know everything but do little about making the world a better place. I and many millions of other choose to make the world of IT a better place.

  9. ernest says:

    Wait a minute, Robert!

    Are you actually saying that “many of the advantages of GNU/Linux” are only relevant to “system administrators”?

    And thereby saying that the remainder of the advantages of GNU/Linux (price, performance, toolset, security, etc) are not compelling enough to persuade web developers to switch?

    That would be a rather unfortunate admission to make, and I assume it was a rare moment of weakness on your part.

    In other words, “that” might not be so “easy” after all.

  10. Clarence Moon wrote, “Could you stoop to explain how it is that visitors to a web site that caters exclusively to tech heads who are looking for information on web page programming only has less than a 5% usage rate for Linux?”

    That’s easy. Since most people use that other OS and one or more popular browsers, the web developers use the same. Often web developers are not system administrators so they don’t need/want many of the advantages of GNU/Linux.

  11. I have proved that NetApplications is extremely biased (Google, alone triples USA numbers with only 10K users).

    Wikipedia is about general knowledge so is a reasonably unbiased source of stats. It is mainly English in content/usage though, a different bias.

  12. ernest says:

    That trend might well be monotonous, Robert.

    Your curious reliance on web statistics is also monotonous.

    What, I believe, you intended to claim is that the trend of your graphs is “monotonic, increasing.” Which they are.

    I accept your apologies on this one for misrepresentation, but:

    W3Schools?

    Wikipedia?

    Care to show us a single profitable company in any country whatsoever that uses these sources as a measure of commercial success?

  13. Clarence Moon says:

    On the web, 60% run GNU/Linux…Here it is, ernest:

    Could you stoop to explain how it is that visitors to a web site that caters exclusively to tech heads who are looking for information on web page programming only has less than a 5% usage rate for Linux? Could it be that Linux is not such a good OS for general purpose applications and does not offer any advantage for web programming activities, so the developers, whose time is precious, do not want to be bothered with it?

  14. ernest wrote, “There is no trend. Show me the trend.”

    Here it is, ernest:


    monotonous increasing share of GNU/Linux

  15. ernest wrote, “Windows Server? Solaris? Anything at all from Apple?” as if they had trounced GNU/Linux.

    Google, FaceBook and Amazon have a Hell of a lot of servers and few of them run that other OS. In my home are several servers and none run that other OS. On the web, 60% run GNU/Linux. M$’s last report showed their database doing well but they failed to even give numbers… I guess they are ashamed. M$ does invent services to hold the hand of that other OS so they do get to stick their server in wherever that other OS is prominent but that is hardly a figure of merit. Imagine a car dealership that sold automobiles that were so unreliable that people needed to hire a mechanic to ride in the back seat… M$’s inActive Directory and SQL server are like that. Unnecessary unless you run that other OS on the desktop.

    Apple does have some products out there but their desktop is pretty rare where I have worked. I think since 2001 I have only seen one or two in education. On the other hand huge businesses and governments have rolled out GNU/Linux desktops. When was the last time you heard of a “roll-out” of MacOS? Forget NetApplications. They show higher share than Apple claims. GNU/Linux has been ahead of MacOS share since about 2003 globally. Apple only has five stores in China… They are not even trying to be global.

    M$ is not thriving. It’s coasting. It’s a house of cards that depends on a lot of players remaining loyal. That’s gone. There are only termites left. A little more than a decade ago, M$ was dictating to OEMs that they must exclusively sell their stuff. That’s gone. Every major OEM is shipping millions of GNU/Linux boxes. The last straw in M$’s downfall is the retail space given in some markets to its products. With Android/Linux taking lots of shelf-space, that is about to end. There’s just no reason for retailers to stick with M$. Last December, when PCs should have been selling light hot cakes, they languished simply because people want small cheap computers. Retailers noticed. This year they will change.

  16. ernest says:

    OK, Robert: fair enough. Here we go. My comments to Koz the cretin in blocks/strong/whatever.

    ‘Phenom wrote:

    “What else is there, except for the market?”

    ‘Nothing (essentially) of course! Except that’s not what I wrote, is it.

    I wrote:’

    “Linux has taken over everywhere except for *one* market (that would be the desktop market to spell it out to you in black and white).”

    Windows Server? Solaris? Anything at all from Apple?

    Not exactly “everywhere.” Just in the bits that don’t generate profits. And even those, being by definition commoditized, are open to total destruction..

    “Your need to cheat and lie betrays your position Phenom.”

    Quote a cheat or a lie, Koz.

    “You are fighting from a defensive position here.”

    Nope, just explaining the status quo to a particularly thick partisan. Why would anybody need to “defend” a massive consumer preference?

    “Every day Microsoft loses a little more ground.”

    It’s a huge company. Some days it loses, some days it gains. Apple is the same way.

    Let’s look at this another way, shall we? General Motors loses 5% of the market one year and claws it back the next. Microsoft doesn’t even need a Government hand-out to do this.

    Contrary to Robert’s “predictions,” it thrives and survives.

    “FLOSS is becoming more relevant as Microsoft becomes less relevant.”

    FLOSS has spent about five years (I’m open to correction on this one, because I’m late on the L) going for relevance. It hasn’t happened. Do you have a helpful graph, here?

    That is the trend

    There is no trend. Show me the trend.

    “and so far there is nothing coming down the pike that’s going to change that.”

    So far as that, yeah. Check the headlights down the pike, kiddo.

    “The harder you try, the more foolish you look. Don’t try so hard next time.”

    I took your advice. This time, I didn’t try at all.

    Seems to work for me.

  17. ernest, thinking small, wrote a lot of adjectives:
    “your sordid little beliefs”.

    That’s a pretty empty comment, attacking the person and his ideas and not giving a solid argument. Perhaps ernest knows nothing and has nothing to say at all. Why does he come here?

  18. ernest says:

    Koz:

    “Your need to cheat and lie betrays your position Phenom.”

    Interesting.

    Have you considered your own compulsive need to cheat and lie?

    Not that it would make any difference, since unlike oiaohm (for example) you never offer up a single argument, link, or anything else to back up your sordid little beliefs.

  19. kozmcrae says:

    Phenom wrote:

    “What else is there, except for the market?”

    Nothing (essentially) of course! Except that’s not what I wrote, is it.

    I wrote:

    “Linux has taken over everywhere except for *one* market (that would be the desktop market to spell it out to you in black and white).”

    Your need to cheat and lie betrays your position Phenom. You are fighting from a defensive position here. Every day Microsoft loses a little more ground. FLOSS is becoming more relevant as Microsoft becomes less relevant. That is the trend and so far there is nothing coming down the pike that’s going to change that.

    The harder you try, the more foolish you look. Don’t try so hard next time.

  20. Clarence Moon says:

    Clarence Moon, wrote of M$’s response to FLOSS, “complete lack of interest”

    That is not a very accurate depiction of my post in the other thread, Mr. Pogson. I was replying to the idea of what Microsoft’s response might be to the mini-Linux versions used on the minimalist devices such as the Raspberry Pi thing. Do you seriously think that Microsoft gives a hoot about those things? I do not.

    As to the rest, most of their comments pertains to server opportunities and that is a very different product marketing world from the desktop where Microsoft rules the roost. For the desktop business, I think that Microsoft’s public pronouncements are far less than 1% of their press releases, as might reasonably be made, given the very slight degree of market attention paid to Linux. A quick survey of such things shows exactly zero such mention.

  21. Phenom wrote, “The market rules all.”

    Except there are laws made to restrict abuse of the market as M$ has done.

    Clarence Moon, wrote of M$’s response to FLOSS, “complete lack of interest”

    Chuckle. Pathetic. Revisionist pronouncement.

    Remember:

    • Steve B calling GNU/Linux “viral”?
    • “Get the FUD”?
    • EDGI>
    • Steve B stating in public GNU/Linux was more of a competitor than Apple?
    • M$ working on virtualizing GNU/Linux?

    It could be that M$ is uninterested in GNU/Linux but their customers certainly are interested and M$ has strange ways of showing “lack of interest”.

  22. Phenom says:

    Linux has taken over everywhere except for one market. You are pathetic.

    What else is there, except for the market?

    The market rules all.

  23. kozmcrae says:

    Leinix_Who wrote:

    Garbage.

    This is 2012, not 1995. But you know that. Do you think anyone listens to your crap garbage? No, not at all. Every now and then someone like you shows up. Probably the same person with a different nym. You write this over-the-hill nonsense about GNU/Linux and FLOSS just like you came out of a 15 year coma.

    Linux has taken over everywhere except for one market. You are pathetic. You post that crap as a parting shot for your lost cause. Good luck with your new career what ever it may be.

  24. oldman says:

    “Virtualized desktops”

    Are mostly running windows Pog….

  25. “overwhelmingly accepted by the world-wide public at large as the de facto standard when it comes to PC operating systems and office productivity software”

    Hmmm. That may have been true 7 years ago, but no longer.

    • GNU/Linux
    • Android/Linux
    • Thin clients
    • Virtualized desktops

    7 years ago, most of these technologies were not present in large numbers on desks, PCs, servers , anywhere in IT. Now they are everywhere. 7 years ago, a reasonable PC cost $700 for hardware. Now it’s ~$250 and many very usable systems are much less than that. The days of the $50 licence for that other OS and $100+ for M$’s office suite are numbered. People want value for money and examine price/performance. That other OS is no longer the “defacto standard”/monopoly on the desktop. In my community, M$ still has a lock on most retail shelves but many businesses sell GNU/Linux systems globally.

    2012-04 Wikimedia

    Operating System Requests Percentage
    Windows 107,264 M 73.38%
    Mac 12,297 M 8.41%
    iPhone 7,511 M 5.14%
    Linux 7,389 M 5.05%
    iPad 3,384 M 2.32%

    2009-04 That other OS had 89.5%. That’s a real change in how people use IT, and use of a desktop PC is changing. More web applications are being used, for instance, which preclude everyone needing an office suite. The webstats measure the installed-base so such a dramatic change in just a few years means the share on units shipped/sold is much less than 90%, probably closer to 60%. Is that “defacto” or monopoly? Perhaps but it is now marginal and shifting rapidly. The world does not need or want M$ to set standards.

  26. Leinix_Who says:

    Robert,

    I’d love to know who your provider of psychedelic drugs is and get some for myself so that I too can create a strong reality distortion field and pretend that I’m the King of France or something magical.

    Here’s some facts:
    1) Microsoft is a profitable company, profitable meaning making money
    2) Microsoft continues to release software that is overwhelmingly accepted by the world-wide public at large as the de facto standard when it comes to PC operating systems and office productivity software
    3) Lienix has failed to gain traction on the desktop for the last 15 years

    Lienix is simply flailing and failing and nothing you say or do will change that.

    Now please, send me your contact info for your psychedelic drug supplier because I want to be the King of France for a few hours.

    ;)

  27. Many businesses are paying for more licences than they need just to keep the auditors away… If M$’s office suite was as widely used as some believe, why are more copies of licences for the office suite being sold than that other OS?

  28. 80% of 500 of the largest enterprises using GNU/Linux now plan to increase use of GNU/Linux. see Adoption Trends 2012: A Survey of Enterprise End Users

    All kinds of organizations are seeing GNU/Linux and FLOSS works better for them. See Swedish National Police

    Check out the City of Ostrava where the users were happy with GNU/Linux but the politicians forced users to that other OS.

    What experience shows that other OS is a better choice?

  29. oldman says:

    “Soon, many will prefer FLOSS.”

    The sad triumph of hope over experience…

  30. Phenom says:

    “Its business division saw revenues increase 9% “reflecting the continued strength of Office 2010″, the company said.”

    vs.

    No one I know likes “the ribbon” or M$ and they do love to buy cheaply.

    Reality check, Pogson.

  31. Phenom wrote. “Their growth in times of hardship makes it sadder for Linux and LO. Despite the attempts to cut costs, people fine that Linux, LO and LAMP are no viable competitor to Windows, Office, SQL Server, Exchange, Sharepoint, and Biztalk.”

    HAHA! HOO! ROFL! That cheers me up. For awhile I thought you were serious. No one I know likes “the ribbon” or M$ and they do love to buy cheaply. Many businesses and governments treat FLOSS on an equal basis for purchasing. Soon, many will prefer FLOSS.

    Now I have to prepare for planting.

  32. Phenom says:

    Microsoft is growing in years of world-wide crisis. These are times when everyone is cutting down costs, and only the really good ones succeed. The mere fact that MS is growing in the midst of a crisis is a proof for a solid business model.

    Their growth in times of hardship makes it sadder for Linux and LO. Despite the attempts to cut costs, people fine that Linux, LO and LAMP are no viable competitor to Windows, Office, SQL Server, Exchange, Sharepoint, and Biztalk.

  33. Clarence Moon wrote of M$, “Rather it is an aging but still very efficient and profitable blue-chip company milking its cash cows”

    The “efficiency” continues to drop. Five years ago, profit from client division was operating income/revenue= $4280/$5279 = 74.7%. In 2012, in Q1, the same quarter, it’s $2933/$4606 = 63.7%. They are beginning to have to work for a living, and there’s less “milk” for a lot more PCs shipped.

  34. Clarence Moon says:

    It must be terribly frustrating to continue to look for a dark cloud on Microsoft’s sunny horizon, Mr. Pogson. Why do you bother?

    Microsoft is not a James Bond’s Goldfinger sort of operation with any conniving master seeking world domination or destruction. Rather it is an aging but still very efficient and profitable blue-chip company milking its cash cows and contributing competitive dividends to institutional investors for the benefit of tens of millions of retired teachers, firemen, and other government workers as well as average Joes with their 401Ks.

    The billions held by Ballmer and Gates and Allen are long ago moved to safe harbors and those fellows will never feel any economic pinch ever. Ditto for the thousand or so middle managers and senior techs who have banked millions if not tens of millions or even hundreds from their ISOs and bonuses. If Microsoft ever did suffer the sort of collapse that you hope for, it would only hurt the hundred million or so who are directly or indirectly invested in MSFT stock as well as the thousands of working stiffs that inhabit the Microsoft campus, many of whom contribute far more to the FOSS community than yourself.

    Spend your time loving FOSS rather than hating Microsoft and Apple.

  35. Those numbers were a surprise to me. I believe some of it is just M$’s averaging technique of reporting “unearned revenue” from long term agreements when convenient. If their revenue tracks PC production and PC production was up 2.3% from the previous year, how does that work? Inquiring minds want to know. Web stats certainly don’t support M$’s numbers.

  36. Phenom says:

    “Windows sales rose 4% against forecasts of a 4% decline”
    and
    “Its business division saw revenues increase 9% “reflecting the continued strength of Office 2010″, the company said.”

    This must have hurt. The OS is going well, Office is going well, and Linux and LO can’t do anything about it.

    Tell me now, Pogson. When should we expect Microsoft to meet its doom?

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