Microsoft Reveals Its Five New Financial Segments After Reorganization

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Microsoft Finance Segments

Microsoft announced a realignment of its organizational structure as part of its transformation to a devices and services company back in July. There are new divisions like Operating Systems group, Application and Services group, and more. But the financial reporting structure will not be same as a operating organizational structure.  Beginning in fiscal year 2014, the Microsoft will report its financial performance based on the five reportable segments described below.

Devices and Consumer

Devices and Consumer (“D&C”) develops and markets products and services designed to entertain and connect people, increase personal productivity, help people simplify tasks and make more informed decisions online, and help advertisers connect with audiences. D&C revenue is generated from three segments:

* D&C Licensing, comprising: Windows, including OEM and other non-volume licensing of the Windows operating system and related software (“Consumer Windows”); non-volume licensing of Microsoft Office for consumers (“Consumer Office”); Windows Phone, including related patent licensing; and certain other patent licensing revenue;

* D&C Hardware, comprising: the Xbox 360 gaming and entertainment console and accessories, second-party and third-party video games, and Xbox LIVE subscriptions (“Xbox Platform”); Surface; and Microsoft PC accessories; and

* D&C Other, comprising: Resale, including Windows Store, Xbox LIVE transactions, and the Windows Phone Marketplace; search advertising; display advertising; Subscription, comprising Office 365 Home Premium; Studios, comprising first-party video games; our retail stores; and certain other consumer products and services not included in the categories above.

Commercial

Our Commercial segments develop and market 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. Our Commercial segments are:

* Commercial Licensing, comprising: server products, including Windows Server, Microsoft SQL Server, Visual Studio, System Center, and Windows Embedded; volume licensing of the Windows operating system (excluding OEM and other non-volume licensing of the Windows operating system) (“Commercial Windows”); Microsoft Office for business (“Commercial Office”), including Exchange, SharePoint, and Lync; Microsoft Dynamics business solutions, excluding Dynamics CRM Online; and Skype; and

* Commercial Other, comprising: Enterprise Services, including Premier product support services and Microsoft Consulting Services; Online Services, comprising Office 365 (excluding Office 365 Home Premium), other Microsoft Office online offerings, and Dynamics CRM Online; Windows Azure; and certain other commercial products and online services not included in the categories above.

About Author

Pradeep, a Computer Science & Engineering graduate.

  • Tips_y

    And by next year, the Hardware Segment will probably look something like this:

    Lumia | Surface | Xbox and Xbox LIVE | Other Hardware

    Granting of course that they keep the name Lumia. But they could also just combine “Surface Tablets and Phones” into one division when the merger between RT and WP8 happens.

    • Yuan Taizong

      And let’s not forget Asha and Nokia’s ”feature phones”.

  • Yuan Taizong

    It’s interesting to see (THE FORMER-)Windows Live division being completely integrated into Windows, while the other online services remain ”Bing & M.S.N.”, but the Windows Essentials are still not merged back into components of Windows, although some have been re-integrated into Windows 8, the Windows Essentials haven’t been updated yet and Windows Live Messenger is still offered as a part of the suite, it would be better to include these apps/software right into Windows, so Windows R.T. would also have better ”desktop software” over the RunTime exclusive apps. (although Windows Media Centre also wasn’t included).

    • grs_dev

      Windows Live Messenger the client has been retired. So no it’s not offered. At least not in the US.

      Windows Live Messenger the service is still alive. You just connect to it via Skype.

      It makes sense to move Windows Live (the identity management in the cloud portion of the ecosystem) under Windows. Your identity should be tied to the core at Microsoft and the core is Windows.

  • NegLewis

    MS wants the OS’s unification under same “layers”.
    IF they could do that… it could do something similar with Symbian.
    Maybe an iWatch Symbian base…