Microsoft’s Latest Form 8-K Filing Details The Three New Reportable Segments



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Few months back, Microsoft announced a change in organizational structure as part of its transformation in the mobile-first, cloud-first world. Few days back, Microsoft announced that it will report its financial performance based on the three new reportable segments described below, and analyze operating income as the measure of segment profitability. The three segments are: Productivity and Business Processes, Intelligent Cloud and More Personal Computing. Microsoft has detailed these Reportable Segments in their latest Form 8-K filing. Read it below.

Productivity and Business Processes

Our Productivity and Business Processes segment consists of products and services in our portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. This segment primarily comprises:

• Office Commercial, including volume licensing and subscriptions to Office 365 Commercial, for products and services such as Microsoft Office, Exchange, SharePoint, and Skype for Business, and related Client Access Licenses (“CALs”).

• Office Consumer, including Office sold through retail or through an Office 365 Consumer subscription, and revenue from, OneDrive, and consumer Skype services.

• Microsoft Dynamics business solutions, including Dynamics ERP products, Dynamics CRM on-premises, and Dynamics CRM Online (“Microsoft Dynamics”).

Intelligent Cloud

Our Intelligent Cloud segment consists of our public, private, and hybrid server products and services that can power modern business. This segment primarily comprises:

• Server products and services, including Windows Server, Microsoft SQL Server, Visual Studio, System Center, and related CALs, as well as Microsoft Azure.

• Enterprise Services, including Premier Support Services and Microsoft Consulting Services.

More Personal Computing

Our More Personal Computing segment consists of products and services geared towards harmonizing the interests of end users, developers, and IT professionals across screens of all sizes. This segment primarily comprises:

• Windows, including Windows OEM licensing (“Windows OEM”) and other non-volume licensing of the Windows operating system, volume licensing of the Windows operating system (“Windows VL”), patent licensing, Windows Embedded, MSN display advertising, and Windows Phone licensing.

• Devices, including phones, Surface, and Microsoft PC accessories.

• Gaming, including Xbox hardware; Xbox Live, comprising transactions, subscriptions, and advertising; first-party video games; and second- and third-party video game royalties.

• Search advertising.

Last fiscal year’s results are presented in the new reporting structure below for reference.

(In millions)
Year Ended June 30,20152014
Productivity and Business Processes$26,431  $26,972
Intelligent Cloud 23,715  21,732
More Personal Computing 42,953  38,407
Corporate and Other 481  (278)
Total revenue$93,580  $86,833
(In millions)
Year Ended June 30,20152014
Operating income (loss)
Productivity and Business Processes$13,087  $13,940
Intelligent Cloud 9,871  8,443
More Personal Computing 5,179  6,150
Corporate and Other (9,976)(774)
Total operating income (loss)$18,161  $27,759

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