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The Surprisingly Small Decline In Microsoft’s OEM Revenue

  1. #1


    Bay Area
    Posts : 21,841
    Windows 7 Home Premium x64

    The Surprisingly Small Decline In Microsoft’s OEM Revenue


    In Microsoft’s fiscal first quarter of 2014, Windows revenue from OEM partners fell 7%. That’s a noticeable decline, given that Windows revenue from third-party hardware partners is the most ‘Microsoft’ income that the company has.

    The decline, however, is somewhat blunted compared to what Microsoft anticipated. Here’s what the company said in its fiscal 2013 year-end wrap up, regarding the first quarter of fiscal 2014: “Excluding the impact of the Windows Deferral, OEM revenue (~65% of total) should decline mid-teens.”

    To see that decline come in at 7% means that the fall in OEM revenue for the quarter was around half of what the company expected. That’s surprising.
    Source

    A Guy

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  2. #2


    United States
    Posts : 3,093
    Windows 8.1 Pro 64-bit


    Duh, they throw us OEM folks under the bus when it comes to upgrades. Especially the 8 to 8.1 upgrade.

    I will never trust MS again when it comes to OEM software. Tells me the majority of the public doesn't realize how they are getting screwed with OEM software.
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  3. #3


    Hafnarfjörður IS
    Posts : 4,376
    Linux Centos 7, W8.1, W7, W2K3 Server W10


    Hi there
    Most of these business contracts have quite long lead times -- If Ms were to STOP releasing Windows and OFFICE RIGHT THIS SECOND it would still take MANY years for the revenue from these products to shrink to zero (if ever).

    People reading these type of financial reports need to understand HOW BUSINESSES (Large one's - not the guy under the Freeway "selling / panhandling you something") actually WORK and how Purchase orders, Purchase requisitions, Invoices, AP / AR etc really work in practice -- often large corporate customers have billing cycles that frequently extend over 180 days or even longer and contracts can last YEARS.

    Cheers
    jimbo
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  4. #4


    Posts : 5,360
    7/8/ubuntu/Linux Deepin


    The author makes a reasonable case:

    Naturally, Microsoft doesn’t make predictions that it doesn’t think that it can’t at least meet, so the “mid-teens” estimate was likely somewhat conservative.
    More importantly:

    I’m starting to feel that there will be a bottom, instead of a long inexorable decline. A 7% slip in OEM revenue for Microsoft is not clean. And it does hurt. But if it is indicator that the PC market is finally slowing its record declines, then we can view it as such.
    I know that we are increasingly post-PC in our daily lives, but I still can’t get f*** done on a smartphone other than tweeting from the dive bar.
    Raises the question:

    How big will the market be for MS hybrid devices ? They are just very small laptops. Could be that many will prefer a smartphone and a decent size laptop to actually get stuff done.

    We shall find out.
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  5. #5


    Posts : 5,360
    7/8/ubuntu/Linux Deepin


    @Popeye,

    I try and avoid oem machines. Loaded with crapware, in some cases ridiculously hard and expensive to get hold of media ($50 - you got to be kidding ). And MS are no help.
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  6. #6


    United States
    Posts : 3,093
    Windows 8.1 Pro 64-bit


    Quote Originally Posted by SIW2 View Post
    @Popeye,

    I try and avoid oem machines. Loaded with crapware, in some cases ridiculously hard and expensive to get hold of media ($50 - you got to be kidding ). And MS are no help.
    I should have installed my retail 7 on this machine when I got it but dumb old me gave 8 a chance. Now I have it the way I want and not going to change everything once again.

    I don't build my own desktops anymore just use large screen laptop instead. Come with latest OEM OS in most cases, not much choice really.

    You're so right about the crapware too, all gone now though.
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  7. #7


    Portsmouth Hants
    Posts : 772
    Windows 8.1 Pro with Media Center


    @Popeye, SIW2

    Smart personal use buyers can get a good deal from OEM purchases - for instance - in the last half of 2012, a Windows 7 home desktop or laptop machine, bought at bargain prices near the end of the run for that OEM product in the UK, upgraded to Windows 8 Pro (+WMC) for the last year, can now be running Windows 8.1 Pro for a piddling little £14.99 additional cost - and the OS is fully transferable to a new machine according to the EULA.

    And the 7-8 upgrade gets rid of the crapware, too, as well as running better under 8 than 7.
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  8. #8


    Well, with 8.1 screw-up they are down by my 200 bucks.
      My System SpecsSystem Spec

  9. #9


    Quote Originally Posted by popeye View Post
    Duh, they throw us OEM folks under the bus when it comes to upgrades. Especially the 8 to 8.1 upgrade.
    How did you get screwed over with the 8.1 upgrade on OEM? I've got some OEM Acers in my office and some OEM dells. They upgraded just fine to 8.1..at least the couple that I tested with.

    Quote Originally Posted by popeye View Post
    I will never trust MS again when it comes to OEM software. Tells me the majority of the public doesn't realize how they are getting screwed with OEM software.
    How so? I don't understand what your concerns are about?
      My System SpecsSystem Spec

  10. #10


    Posts : 5,360
    7/8/ubuntu/Linux Deepin


    Oem keys can't d/l the installation media. Anybody beyond beginner will want that.

    It is actually worse than popeye suggests. Even retail key holders weren't intended to get the installation media. They only get it with a trick.

    Interesting new approach by MS.

    7 installation media is readily available from Digital river. 8.1 media is where ?

    Not sure that is good idea. It just pisses off the legit customers and encourages uploads of uncertain provenance.
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The Surprisingly Small Decline In Microsoft’s OEM Revenue
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