Microsoft moves up in the data centre

Microsoft saw its revenues increase by five per cent last quarter to $9.6bn. Net income was $2.6bn, up almost 193 per cent year-over-year.

The company spent $2.5bn on legal costs in the same quarter last year as a result of a settlement with Sun Microsystems and a fine imposed by the EU. Legal costs this quarter were $768m, which included settlements with Gateway and Burst.com.

Microsoft withstood a harsh market for enterprise software, with the server and tools business showing a 12 per cent rise in revenue. The company singled out Exchange Server and SQL Server as the strongest performers.

Sales of software for mobile and embedded devices grew by 31 per cent as a result of a sharp rise in the number of mobile phones running Windows Mobile.

Revenues fell short of analyst expectations, however. Microsoft also missed its own revenue expectations announced in January. The company blamed movements in exchange rates as well as lower than expected sales of software for client computers including Windows and Office.

Microsoft has an optimistic outlook for the next fiscal year, which starts this July, expecting revenues of between $44.1bn and $43.3bn. Projected profits are $18.3bn to $18.9bn.