Windows 7 extended support fuels Microsoft Q2 earnings

Don Sharpe
by Don Sharpe
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Earnings report

Microsoft posted better-than-expected quarterly results, partly thanks to revenues from Windows 7 extended support. The operating system hit its eos earlier this month, after which those using it have to pay Microsoft to continue receiving security updates.

The company is providing the German government with ESUs for Windows 7 PCs, and it expects to receive about €800,000 in return this year.

Windows 7 end of support catalyzes revenue growth

Some analysts had estimated Microsoft’s revenue to reach $35.68 billion in the second quarter. That would have been a 9.8% rise from a year ago.

But according to the latest Microsoft quarterly results statement, the figure jumped 14% to $36.91 billion.

Commercial strength played a huge role in the success of Microsoft products over the period covered in this report, with revenue from Windows commercial solutions and cloud services soaring 25%. Windows OEM sales rose 18%.

Microsoft said that Windows OEM Pro sales surged ahead of the January 14 eos for Windows 7. Despite hundreds of millions of PCs around the world still running on the OS, a significant amount of users have moved to Windows 10, helping to drive Microsoft’s commercial revenue.

Windows OEM Pro revenue grew 26%, driven by continued momentum in advance of Windows 7 end of support and healthy Windows 10 demand, in addition to the benefit from the low prior year comparable.

Microsoft can expect the demand for Windows 10 to continue growing as more enterprises and government agencies gradually ditch Windows 7. Premium security updates for the defunct OS won’t be available forever, so users concerned over the safety of their information systems and data are planning on upgrading sooner or later.

Azure revenue soared 62%

While the three months ended December 2019 have been good for multiple Microsoft products and services, Azure revenue growth of 62% did the heavy lifting to take the company’s overall sales to higher ground.

In October last year, when the U.S. Department of Defense awarded the Joint Enterprise Defense Infrastructure (JEDI) contract to Microsoft, it gave Azure something of a shot in the arm. The cloud computing product is set to inject up to $10 billion into the firm’s books over the next decade.