Office 365 subscriptions furnish 4% of Microsoft's Office division revenue

Company bullish on rent-not-buy strategy's future as it touts $1B annual income

By , Computerworld |  Software

Office sales to consumers and small businesses, who purchase Office on a per-copy basis -- Microsoft calls that "transactional" -- were down last quarter, Microsoft said, because of the decline in PC sales. IDC pegged the contraction at 14% year-over-year, while rival research firm Gartner said it was a slightly-less-severe 11% drop.

For the first quarter, Office revenue derived from consumers was "roughly in line with the consumer PC market," said Suh, meaning that it was down by double digits from the year before.

The same is expected this quarter, Klein added. "Transactional revenue, which is the remaining 40% of the division total, should be in line with the x86 PC market," he said, referring to the quarter that ends June 30, also the end of Microsoft's fiscal year 2013.

MBD accounted for 31% of Microsoft's total revenue for the quarter, the most by any single division. Its operating income, or pre-tax profit, of $4.1 billion was also the most of any division, and was up 8% from the same period the year before.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is

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