How does microsoft make money

And, finally, there's the company's more personal computing business, which includes heavy-hitters like its Windows licensing revenue and Xbox-related revenue, as well as the revenue from its Surface family of products. Data source: Microsoft K filing. As you can see, Microsoft's revenue and operating income by segment were fairly evenly split -- each segment is a large and important contributor to the company's overall business.

Now, Microsoft's fiscal isn't over yet, but it's also worth looking at what the company has reported so far for each segment during the fiscal year:. Data source: Microsoft Q filing.

In the first half of , the percentages of each business's contribution to the company's total revenue and operating income didn't change relative to the full-year results, even though the magnitudes of those contributions changed slightly.

It's also important to understand that there are seasonal factors at play, so the percentage contributions of each business during the first half of might not tally exactly with what the full-year results will ultimately be.

Check out the latest Microsoft earnings call transcript. Microsoft is a diverse business that allows investors to gain exposure to a wide array of compelling technology trends.

Indeed, Microsoft allows investors to participate in the stabilization of the PC market, the continued secular growth in gaming, the booming cloud computing market, and the ongoing need for productivity software. Oh, and if you were a fan of LinkedIn before it was acquired by Microsoft, owning Microsoft shares get you exposure to that business, too. The company is one of the most -- if not the most, depending on the day -- valuable technology companies for a very good reason, and investors looking to bet on a best-in-breed technology giant with many growth irons in the fire would be wise to give Microsoft a close look.

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These business segments are represented in the following diagram. On September 28, , Microsoft announced changes in the reporting of its financial results. Microsoft consolidated six operating segments into three. The different product groups were moved around to fit under the three reporting segments. The new structure, with the same product groups, is represented in the following diagram:.

Terms and Conditions - Privacy Policy. Sign in. Forgot your password? Get help. Password recovery. Understanding Microsoft Business Model. Microsoft offers: Software products , including operating systems for computing devices, servers, phones, and other intelligent devices; Server applications for distributed computing environments; Cross-device productivity applications; Business solutions applications; Desktop and server management tools; Software development tools; Video games; and Online advertising.

Hardware products , including PCs, Tablets, Gaming and entertainment consoles, Phones, Other intelligent devices, and Related accessories. Cloud-based solutions. Consulting and product solution support services. Training and certification services. Office Consumer includes Microsoft Office applications sold through retail or through an Office Consumer subscription.

Office Consumer services include Outlook.