Microsoft Financial Results: Q1 FY21

Image by Gerd Altmann from Pixabay

As I think most of us expected, Microsoft’s strong financial results continued in Q1 FY21.

Headline figures

In July – September 2020, Microsoft saw:

  • Revenue up 12% to $37.2 billion
  • Operating Income up 25% to $15.9 billion
  • Net Income up 30% to $13.9 billion
  • Operating Expenses grew by 10% (primarily driven by investments in Azure)

This is a fantastic performance as Microsoft – unlike many of their rivals – continue to grow and thrive during the COVID-19 pandemic. While IBM, Oracle, and SAP are all reporting lacklustre numbers – Microsoft are doing very well. This is mainly due to Microsoft’s wide and varied portfolio – if you don’t want one thing, there are plenty of others they can sell you – but also due to the relevance of their product line-up.

Not only are Microsoft 365 and Azure hugely relevant right now, so are products like the Power Platform and Dynamics 365 as they enable new ways of working and digital transformation. This is a strength many of their competitors don’t have – if you don’t want to buy a big database or an ERP system, that dramatically reduces the options for Oracle & SAP for example.

Product Highlights

  • Office 365 commercial revenue was up 21%
  • Dynamics 365 again grew by 38%
  • Azure saw another quarter of 48% growth
  • LinkedIn was up 16%
  • Surface revenue rose 37%
  • Enterprise Mobility & Security install base has grown to 152 million+ seats

On the flip side – Office Commercial was down 30% showing the move away from on-premises perpetual to cloud-based subscriptions continues apace.

Microsoft also called out “continued weakness” in transactional licensing as they saw a 1% drop in “server products” revenue. To be honest, I’m surprised it isn’t a bigger drop than that…

Another drop in Windows Pro OEM sales (22%) while Windows non-Pro OEM grew by 31%. This will partly be due to organisations de-prioritising laptop refreshes right now but also, I suspect, by users working from home buying themselves new “work” devices. That latter aspect opens up some licensing issues – as volume licensing Windows licenses generally can’t be applied to Windows Home licenses.

Microsoft are in a very strong position and it’s further proof that Satya Nadella has overseen one of the greatest corporate turnarounds for a long time!

Further Reading

Microsoft volume licensing customers get access to Surface devices

As reported by Mary Jo Foley of ZDNet, Microsoft have made it a little easier for volume licensing customers to get their hands on the Surface RT & Surface Pro devices with a new website –




Text from the site:

Welcome to the Surface commercial customer ordering site. Using the link for your country below, you can order Surface devices, accessories, and after-market service plans (availability varies by market).

Some important notes:

  • A valid Purchase Order (PO) is required for each order form submission
  • Lead times for delivery and order requirements may vary depending on inventory.
  • If you do not currently have a volume licensing agreement with Microsoft, there may be additional processing time to setup account and credit terms

Protect your Investment

While Surface devices come with a standard one-year limited warranty, you may want to consider purchasing a Surface Extended Hardware Service Plan. This plan is available for both Surface Pro and Surface RT devices and includes an extension of the hardware warranty up to 3-years.
The plan includes shipping a replacement unit out prior to your product return to minimize downtime. The Extended Hardware Service Plan can be purchased up to 45 days after device purchase. For details on what is and is not covered in the Extended Hardware Service Plan for Surface devices, please see the Terms and Conditions.
The Extended Hardware Service Plan is priced at $200 per device for Surface Pro and $150 per device for Surface RT. At this time, the Extended Hardware Service plans are available only in the US and Canada and via direct purchase from Microsoft.

You need to log into the website to see the above screens and move through to the pricing & ordering sections. I’d expect that any login that can access the VLSC (Volume License Service Center) will be able to sign into this site.

This is an interesting move from Microsoft – still not involving their channel partners but at least making it easier for corporations to purchase these devices! It’s interesting to note that they’re not offering a discount via this new site – the prices are the same as those on the public website.

Also, the Surface Pro isn’t listed on the UK page but it is on the US page, so it conforms to the current availability schedule. No early Pro goodness, even for volume licensing customers Smile

Surface Pro: We have a release date

Microsoft’s Surface Pro tablet will be released to the world (sort of) on February 9th 2013.


I say sort of because that is the day MS stores (physical & virtual) will start to sell it, along with Best Buy & Staples in the US.

No word of other retailers in the UK and more importantly, no word on when/if it will be made available to the “Channel” – the network of distributors and resellers that makes up the vast majority of Microsoft’s partner ecosystem.

This to be is of utmost importance – we (my company and the channel in general) are seeing so much interest in this device that, if we are left unable to fulfil this for our customers, it will be perhaps the biggest run-in Microsoft has ever had with it’s partners.

We’ve had pricing for a little while now but still no answer as to channel availability…and I’ve been asking!

ZDNet’s Ed Bott has got more info on this, as well as news of new accessories here:

Windows RT has been Jailbroken

Here’s quite an interesting development for a Monday morning….Windows RT, Microsoft’s new tablet OS, is no longer restricted to just apps obtained through the Windows Store.

It is now possible to run unsigned ARM-compiled apps on the Windows RT desktop, using  an exploit in memory to make in possible to run desktop based apps, other than Office 2013 & IE 10. It seems that as it’s an in memoery exploit, it won’t persist – meaning it will have to be “re-cracked” each time the device is turned on. This may well mean it finds little favour with users but is, if nothing else, a big step forward in this arena.

This opens up the possibility of a homebrew market for Windows RT, enabling developers to create apps without going through the costs and processes associated with the official Windows Store route.

That said, I’ve been told on Twitter that it’s only £35 a year for personal Windows Store registration (which comes with free development tools) and isn’t a particularly arduous process to get an app accepted by Microsoft (thanks @CraigHawker); which doesn’t really seem like it will be preventing many developers from getting started on Windows RT app creation.

The other potential outcome is that it will lead to app piracy, enabling people to install apps that they haven’t paid for.

Thanks to The Verge for finding this.

Office RT Commercialization Licenses

Microsoft RT devices all come with a copy of Office 2013 Home & Student which, as you may well have seen now, cannot be used for “commercial purposes”. Microsoft mentioned that a “commercialization license” would become available…I expected it in November but can confirm that it is now here. From the December Select Plus price file:

OffHomeandStdntRT 2013 SNGL MVL

@ roughly £45 (ex VAT) per license.

Purchasing this license will allow staff to use the edition of Office on their RT tablet for work, such as creating PowerPoints, working with spreadsheets, managing OneNote workbooks etc.

However, if the user has a license of Office 2013 (via VL or Office 365) on their desktop, this extra license is not required.

It’s worth noting that this license is available only as a “standard” SKU, so purchasing with SA (Software Assurance) is not an option. It will be interesting to see if this license grants these “commercialization” rights to future editions of Office RT (if indeed there are any), or if a new license would be required to use an RT tablet with Office H&S 2016?

Microsoft Surface Pro Pricing Leaked

Microsoft Surface Pro is the upcoming Redmond produced tablet that will run full Windows 8 Pro, and thus allow installation of legacy/LOB apps etc. We’ve seen recently the hardware spec for the device ( and now, via Softpedia, we’ve got leaked pricing from Germany.

128GB Surface Pro = £729 / $1165 / €909

64GB Surface Pro = £648 / $1035 / €809

If those prices are correct (and there’s a high chance they’re not) then that is some quite amazing and aggressive pricing from Microsoft.

I can almost guarantee that all the customers I’ve spoken to about Windows 8 over the last few weeks would purchase those units with barely a second thought. Organizations are, in the most part, sold on Windows 8 and sold on the tablet form factor…it’s the £800+ price tag of many Windows 8 devices that causes them to pause. So a Core i5, 4GB RAM, Full HD, 64GB SSD device for £648 would be a real winner.

It is for that reason that Microsoft MUST ensure this device is available via “The Channel”, the network of distributors, resellers, VARs, LARs etc that make up 95%+ of their business. I’m seeing us lose sales at work, as customers are set on buying the Surface RT & so are going direct to Microsoft. In some cases, we’re able to cross sell to another Windows RT device such as the Samsung Ativ Tab but not always…and that’s to be expected. The Surface RT is such a great piece of hardware that people are bound to want that in a lot of cases. I’m sure this is the case for all the other resellers across the UK and indeed any other location.

Microsoft Surface Pro

The Microsoft Surface RT is making waves in the consumer space and, to some degree, the world of business too. It looks great and runs great…but it doesn’t run legacy software and doesn’t integrate into Active Directory managed domains. Due to this, many organizations are looking to wait for the Surface Pro which will run full Windows 8 Pro/Enterprise..

We don’t have a nailed on release date yet (other than at least 90 days after Windows 8 RT) but we do have specs:

  • Screen size = 10.6” ClearType Full HD, 1920×1080, 16:9
  • Weight = <2lbs
  • Storage = 64GB & 128GB
  • Memory = 4GB
  • Pen Input = Yes – pen included with purchase
  • CPU = 3rd Gen Core i5
  • Connectivity = Wi-Fi 802.11a/b/g/n, Bluetooth 4.0
  • Ports = Full Size USB 3.0, Micro SDXC slot, Mini Display Port

You can see the full spec here:

The pdf does still mention the RT version of Office being included for free – I think someone might need to update that!

I like the spec of the machine, it looks decent but I feel the lack of 3g/4g is an odd omission. I read on the Reddit AMA that they had to choose between 3g and the Vapormg casing and that trade off, on a consumer device, makes some sense…but on a business device? I’m not so sure.

Even if people don’t really use 3g on tablet devices (and I’m sure MS studied/conducted research that showed this) it’s still the kind of thing that can put people off purchasing. If there’s another device with similar spec and a similar price AND offers cellular connectivity, I anticipate many would choose that.

Windows RT Office Licensing

More Surface info was announced last night, with pricing and pre-orders being made available.

All was great and then something of a hubbub started on Twitter when it was noticed/realised/discovered that the Office included in Windows RT can’t be used for commercial purposes or, to quote MS:

“not for use in commercial, nonprofit, or revenue-generating activities”

Now, I’ve known this over 2 weeks and didn’t really think it was particularly surprising; it is, after all, Home & Student edition – which has never allowed those usage scenarios.

I’ve also known that, through:

  • Having a copy of Office 2013 on the RT device user’s primary device


  • That user having an Office 365 subscription that includes Office


  • Buying the “Office RT commercialization license” that will/should be available from November

You will be able to use said RT Office license in the previously restricted manners mentioned above.

I’m honestly surprised at the furore around this…it follows the same rules as the previous version and is related to a product not actually out yet…is that just me?

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