Microsoft’s Revenue from Office 2007 & Vista
Goldman Sachs analyst Sarah Friar in a research note released last week estimates on Microsoft’s revenue take per copy of Office 2007 and Windows Vista.
“About 40 percent of Office revenues are from fully packaged product and volume license agreements, 40 percent are from annuity contracts, and 20 percent are from OEM sales, compared with about 5 percent, 15 percent, and 80 percent for [Windows] client revenues, respectively,” Friar wrote
What does that translate into? Simply that, Office 2007 has sold more copies then Windows Vista.
Goldman Sachs estimates that, worldwide, consumers bought 1.9 million Vista upgrades in the second quarter and will buy 1.5 million upgrades in the third quarter. The expectation is based on the idea that upgrades will dramatically diminish after the first six months of widespread Vista availability.
While most people will buy Vista on new PCs, “adoption in the beginning will likely be slower than for Windows 95 or Windows XP,” Friar explained.
Goldman Sachs estimates that one in eight PCs ships with Office Standard.
Goldman Sachs sees new SKU Office Basic cannibalizing sales from Standard. However, the expectation is that higher Basic volumes—some replacing pirated older Office versions—will lead to a net revenue gain.
“We believe the introduction of the lower-priced Office Basic 2007 SKU can add about 1 percent to Information Worker (now part of MBD) revenue growth in FY2008,” Friar wrote.
Vista, Office2007, Microsoft, Goldman Sachs
Vista, Office2007, Microsoft, Goldman Sachs
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