"The three biggest components of the 11% total revenue growth were the retail upgrades, the sales of the Surface [RT tablet] and then multi-year licensing agreements within enterprises," said Klein in the question-and-answer part of the earnings call.
Klein also admitted what he called "some tailwind" from sales of Windows licenses -- presumably Windows 8 licenses to computer makers known as OEMs for "original equipment manufacturers" -- that have been installed on new machines that remain unsold.
"There was some tailwind from inventory, which was ... within the healthy range that we typically see," said Klein. "But the three big impacts, all up, on the Windows revenue were the retail upgrades, sales of Surface and the enterprise annuity business."
O'Donnell was skeptical, and believed that the "tailwind" Klein downplayed was really the driving factor in Windows' revenue upswing.
"Our sense is that the [OEM] build [numbers] going into Windows 8 were relatively high, and that there is a lot of remaining inventory because sell-through was relatively modest," said O'Donnell, echoing other analysts who argued that fourth-quarter PC sales were sluggish at best. "They sold more [licenses] than OEMs needed."
Moorhead wasn't buying it.
"This isn't just inventory sitting out there," Moorhead countered. "That's not what's coming out of my discussions with OEMs or retailers. [Such large inventories] would be a monumental collapse if you think about it. You just can't sit on that much revenue."
Instead, said Moorhead, he put his money on Klein's mention of increased sales of volume license agreements to enterprises, which Microsoft said had climbed by double digits.
"The big boost in revenue is coming from Windows 7, from very large deals that Microsoft does with enterprises," said Moorhead. "That's the only way you can explain [the 11% increase in revenue]."
He discounted Surface RT sales for the revenue boost, pointing to the limited distribution for the tablets during much of the quarter, and a lackluster response by customers.
Microsoft did not disclose sales for the Surface RT last week.
Pumping up volume license sales would be relatively easy for Microsoft, Moorhead noted. Because those deals involve intangible goods, all Microsoft would have to do, he argued, was offer customers better-than-usual terms to get them to sign on the dotted line.
Neither analyst commented on another of Klein's explanations for the Windows revenue increase, Windows 8 upgrades. But those upgrades may have played a bigger part than most realize.