Microsoft report shows decline in software sales

Some days back Microsoft released their quarterly financial reports, which showed that their profits nearly doubled, compared to similar periods last year. However, the interesting bit is that the revenues did not increase by much. The profit jump is mostly due to lower legal expenses for the company and stronger sales of server software and its Xbox video game.

The revenue growth was just 5%, which was much below the expectations of the market and the investors. The company reported modest sales growth of the Office Suite and Operating System products from the company. Microsoft reported an earning of USD 2.6 billion for the quarter. This was up from around USD 1.3 billion during the same quarter last year.

Difference in the legal expenses was more commendable. Last year during the third quarter, Microsoft spent around USD 2.5 billions on settlement claims and other legal stuff. This year, the spending were down to a meager USD 768 million. This contributed in a big way into the growth of the profits without any real growth in the sales department.

Revenues from the sales of the windows Operating System grew at just 2.2% while the growth in the MS office Suite was in the region of 2.5%. These are the biggest products from Microsoft and like Apple; they are also entering the situation where their other businesses contribute more than the basic stuff. For Apple it is iPod and iTunes, for Microsoft Xbox is becoming a cash cow.