Microsoft reverses NZ revenue slide

Investments internally and in its partner channel during 2006 will pay off in 2007, says managing director

Microsoft New Zealand reversed sliding revenue in 2006, achieving significant top-line sales growth. However, profitability remains off its peak.

Accounts lodged with the Companies Office this month show Microsoft’s local business grew from $48.9 million in 2005 to $54.8 million in 2006, after a slide from $53.5 million in 2004.

However, while both operating surplus and net surplus have also grown year-on-year, they are still down on that achieved in 2004. The 2004 net surplus of $7.1 million slumped to $4.2 million the next year. It has since recovered, to $5.4 million.

During that period Microsoft issued no major refreshes of its Windows operating system or the Microsoft Office desktop suite, both of which were updated late last year.

Microsoft New Zealand managing director Helen Robinson says year-on-year revenue grew 12% between 2005 and 2006 because of other product releases in that year, including SQL Server, BizTalk, Visual Studio and Microsoft CRM.

“Microsoft and its partners collectively saw an uplift in those product lines,” she says.

Robinson says customers are realising the company’s tools are vital if they are to connect effectively with customers. The business sector and, increasingly, the not-for profit sector are adopting technology to drive bottom line efficiency or to enable better customer service, she says.

Robinson says the company also invested both internally and in its partner channel during 2006. Microsoft New Zealand increased its head-count by 25 and also invested in skills training in the partner channel, she says.

Robinson expects that investment to pay off in 2007, as is happening around the world. She cites the hiring of John Bessey, to manage Microsoft’s partnerships, as one such “very considered move”.

Robinson also acknowledges the contribution Microsoft’s consumer products made to the sales improvement, particularly the Xbox.

Internationally, Microsoft continues to grow. In October it announced revenue of US$10.8 billion ($15.64 billion) for the quarter ended September 30, 2006 — 11% up on the same quarter in 2005.

“The solid revenue results for the quarter were at the top end of our expectations and represent a very good start to the fiscal year,” said Chris Liddell, Microsoft’s chief financial officer, at the time.

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Tags visual studioMicrosoftXboxsql serverrobinsonbiztalkchannel

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