M$'s traditional software sales tumbled in the first quarter of 2009 and things are going to get worse for them.
The company Thursday fell back to highlighting its un-sexy multi-year licensing agreements with big customers as proof its business is sound and can endure a recession and netbooks onslaught, as it saw software sales tumble.
The company's Windows client business grew by half its anticipated target - two percent instead of four compared to last year. Microsoft said fewer traditional PCs and more netbooks had shipped than expected. Also, revenue from OEMs was down as they shifted to sell cheaper netbooks.
Revenue fell nearly five percent and net-income was flat compared to the July quarter.
This result comes despite it being nearly impossible to buy anything but netbooks without Vista and good general hardware sales. PC shipments were up 10 to 12% in the same period.
Vista is dead. One year after their best quarter in eight years, it can safely be said that the Vista sales spurt is over. It was probably over a year ago. Because fewer than 10% of PC owners use Vista and big retail chains like CompUSA and Circuit City have seen significant pain we might also conclude that Vista's sales burst was just channel stuffing. No one wanted it and no one bought it.
Microsoft revised their projections downward for economic conditions and they don't have anything new.