Microsoft CFO Amy Hood says she should have talked more about Windows

Microsoft Chief Financial Officer Amy Hood speaks at the Fortune’s Most Powerful Women Summit in Laguna Niguel, California on October 2, 2018.

Philippe Faraone | Getty Images

Microsoft finance chief Amy Hood said on Tuesday she should have spoken more about the software maker’s Windows operating system, whose revenue growth accelerated during the Covid pandemic.

Personal computers do not attract as much attention as new technologies, such as cryptocurrencies or augmented reality. But Windows, which dates back to 1985, still brings Microsoft tens of billions a year in highly profitable revenue, with more than 1.4 billion devices running Windows 10 from 2015 or Windows 11 from last year. Windows held nearly 80% market share in 2021, compared to around 11% for Google-backed Chrome OS and 8% for Apple’s MacOS, according to data from tech industry researcher IDC.

After Satya Nadella replaced Steve Ballmer as CEO of Microsoft in 2014, the company initially shifted the business from its historical focus on Windows, opting to talk more about cross-platform services and cloud infrastructure. After the pandemic took hold, however, things seemed to change. In 2020, Microsoft said people were spending significantly more time on Windows 10, and the gains persisted through 2022. In the fourth quarter, Windows revenue grew nearly 20%.

Hood always talks about Windows on Microsoft’s earnings calls, and in the last two she’s touted faster-than-expected growth rates for Windows sales to device makers, thanks to a strong PC market, especially for commercial devices that generate more revenue per license.

On Tuesday, Morgan Stanley analyst Keith Weiss at the company’s technology, media and telecommunications conference asked Hood about his “more positive tone” about PCs in recent calls on the results.

“I should have said Windows,” Hood replied.

“The usefulness of this device and my inability to accurately explain it may actually be the problem, people are realizing now, ‘Wow, she just figured it out, Windows matters.’ No,” she said. “I just figured out how to talk about it. And so the reality is that a big-screen device over the last two years we’ve all been reminded of the role it plays. There are more PCs per household and more of time spent on the PC. We continue to see that even with the hybrid. And so there are jobs to be done. And that plays a big part in a lot of jobs to be done.

The growth of Windows has benefited other parts of Microsoft’s business. Hood specifically mentioned Office 365 consumer subscriptions, search advertising, Internet browser market share, and gaming.

“This is the one where whatever review form I got this year should say, ‘She forgot to talk about Windows for a long time.’ And now we’re going to fix that because you see it in users, you see it in use, you see it in the market,” Hood said.

Supply shortages have impacted sales of Windows, as well as Surface PCs and Xbox consoles, for several months, and on Tuesday she said that while the constraints are still present, device makers are stepping up their efforts. efforts.

“I’m optimistic,” she said. I’m more optimistic about what Windows can mean for a user. Now we can keep improving it, making it more integrated, making the things you love to do easier. For me, it’s Excel. For others, maybe something else is fun.”

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Steven L. Nielsen