Why Microsoft earn less and less from Windows Operate System

Windows operating system has always been one of Microsoft’s main source of income. But the tech giant recently released filing shows, Windows operate system sales fell 13 percent year on year 2014. PC sales decline is one reason, but XP’s demise failed to boost sales of a new version of the Windows system, also an important factor.

Last week, Microsoft released its second-quarter earnings report, which appeared a few bright spots, such as mobile devices and cloud services sales rise. Although due to impact of acquisitions and layoffs, Microsoft’s profit fell 10.6 percent to $ 5.9 billion, but the company sales for the end December 31, 2014 was achieved overall growth of 8%.

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Although Microsoft sales gains gratifying, but new computer installation revenue arising from the Windows operating system, fell by 13 percent, you know it has been a reliable source of income. Why did this happen?

First, the PC market has been sluggish in recent years. That is running Microsoft’s operating system personal computers sales decreased.
But there is another reason that Microsoft cannot control.

By the end of 2013, Microsoft Windows XP has basically not to provide technical support for business users. Many companies in the IT sector and the financial sector therefore believe, and finally it is time to upgrade this for more than ten years of history of the old system, and this will increase sales of new systems such as Microsoft’s Windows 8.

However, XP’s demise last year did not boost sales of Windows systems, which explains an annual sluggish Windows sales performance reasons. (Microsoft also said to lower sale price of the academic institutions of the Windows system, but also affects the category of income.)

We can expect, Windows may not be Microsoft’s cash cow in the future. The company recently announced the upcoming launch of the next-generation operating system Windows 10 will provide a free upgrade older versions for Windows users. This initiative is very friendly to consumers, should increase the rate of adoption of the system, but it will further reduce the Windows revenue. However, if Microsoft can continue to triumph in the mobile and cloud services revenue will be sufficient to compensate for the resulting loss of free upgrades.

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