Despite the earnings decline, the company's Windows division generated sales of $5.88 billion, up 24 percent year on year. Even taking out the so-called deferred sales for software ordered earlier but officially accounted for during the quarter, revenue for the unit was up 11 percent.
Overall revenue for Microsoft increased 2.7 percent to $21.46 billion in the quarter. Microsoft fell victim to the law of big numbers more than a decade ago. Now the question is whether its round of upgrades geared for the tablet and mobile era can compete with products from Apple and vendors betting on the Android mobile OS.
Meanwhile, IBM's fourth-quarter net income increased 6.3 percent to $5.83 billion, though total revenue dipped about 1 percent to $29.3 billion.
The company's software products and sales in developing markets returned to growth, though its services business declined. Investors appeared to like the company's report though, sending shares up this week. IBM's guidance of 2013 helped. The company forecast earnings per share of at least $15.53, an increase of 8 percent.
For its part, Google wowed investors by reporting that quarterly revenue, excluding fees to sites that run its ads, hit $14.42 billion, up from $10.6 billion a year earlier. Net income including the loss from the Motorola Home business division was $2.89 billion compared to $2.71 billion. Google shares jumped from $702.81 before the report to close at $754.21 Thursday, though they slipped by a few pennies in Friday afternoon trading.
On the software front, SAP sales were a harbinger of good things to come this year. SAP said revenue in the fourth quarter grew by 12 percent to ¬5 billion (US$6.6 billion), helped by strong growth in the market for its cloud applications, its HANA in-memory database and mobile applications. SAP's operating profit was, however, down by 5 percent in the fourth quarter to ¬1.6 billion, mainly because of expenses on share-based compensation and acquisition-related charges.
But SAP forecast software and software-related service revenue growth of 11 percent to 13 percent in constant currency terms for the year, excluding one-time items. SAP shares rose steadily this week.