Monday, August 16, 2004

The New York Times > Technology > Ambitious Package to Raise Productivity (and Microsoft's Profit)

The New York Times > Technology > Ambitious Package to Raise Productivity (and Microsoft's Profit) "The information worker business at Microsoft, which is nearly all from Office, had revenues of $10.8 billion in the year ended in June, and operating profit of more than $7.15 billion. As a stand-alone business, Office - which on average sells for about $275 - would be slightly larger than the second-largest software company, Oracle, and far more profitable. Only the Windows operating system, the other pillar of Microsoft, is slightly larger.
"Making collaboration faster, easier and more efficient will be the next revolution in worker productivity, and we want to be in the forefront," said Peter Rinearson, vice president for new business development in Microsoft's information worker group. "The goal is to make Office a tool that steadily delivers productivity improvements. It becomes a competitive advantage for the companies that use it well. If you don't have it, you can't keep up."
Microsoft's Office business grew 14 percent last year, but analysts expect the rate to slow considerably this year, as the financial impact ebbs of upgrade contracts that Microsoft pressed customers to sign a few years ago. The underlying growth rate of the business, analysts say, is 6 to 8 percent.
Programs like SharePoint, InfoPath and OneNote, sold separately, will add to revenues. Their retail price is typically about $100 each for individual users, but sizable corporate discounts are common. Still, a few add-ons would increase the annual fees of $200 or so that a large corporation might pay per employee in a subscription-style contract for Office running on Windows, including upgrades, maintenance and some programming features like tools for designing Web pages."

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