Vista drives sales at Microsoft

Software giant Microsoft has reported annual sales of more than $50bn for the first time on the back of strong demand for new products such as Windows Vista.

The supplier says sales rose 15 per cent to $51bn (£25bn), while profits have also increased, up from $12bn (£5.8bn) to $14bn (£6.8bn).

The strong results have come despite costs stemming from repairs to its Xbox 360 computer console. Microsoft is facing a bill of more than $1bn (£487m) to cover the cost of offering extended warranties to console owners.

Sales were driven primarily by consumer purchases of new flagship products Windows Vista and Microsoft Office 2007, says chief operating officer Kevin Turner.

‘Surpassing $50bn in annual sales is a testament to the innovation and value that our product groups delivered into the marketplace,’ he said.

‘In 2008, we will continue to drive growth through new product offerings, such as Windows Server 2008, Visual Studio 2008, SQL Server 2008, Microsoft Dynamics Live CRM and Office PerformancePoint Server 2007.’

Sales for the fourth quarter increased 13 per cent to $13.4bn (£6.5bn) while profits were up 11 per cent to $3bn (£1.5bn).

Microsoft expects to generate $12.6bn (£6.1bn) next quarter and $57.8bn (£28.2) for the next year.

Microsoft is performing strongly in its three main areas, including the client group, business division and server division, says Ovum analyst David Bradshaw.

‘Severs and tools revenue has risen by 16 per cent and considering that many of its products are due for new versions, while the new version of Windows Server is well overdue, this is an extremely good performance,’ he said.

Microsoft’s business division has also raised revenues 13 per cent to $16.4bn (£8bn) but the hidden gem is the Dynamics business.

‘The Dynamics business is doing extremely well and cannot be far off $1bn (£487m) in revenue on its own account,’ said Bradshaw.

‘The challenge to Microsoft will come in maintaining this kind of performance as it and its partners adopt software-as-a-service as a delivery model for an increasingly wide range of products and services.’

by Dave Friedlos

Google launches business-focused service

Google has unveiled a tailored search tool for businesses in the form of a hosted service.

The search engine giant claims the service - which ranges in price from $100 a year for searching up to 5,000 pages, and $500 a year for up to 50,000 pages – will help bring up more relevant results and generate more referrals for each member business.

Dave Girouard, vice president, Google Enterprise, said: “Millions of businesses have a web presence but offer users no ability to search their site. While many of these businesses invest in search advertising and search engine optimisation to help customers find their business, customers are left on their own to navigate content once they land on a site.

“As Google continues to make search technology more accessible to businesses of all sizes – first with our appliances and now with hosted search services – we are reducing the hurdles of cost, complexity and time so that small businesses can help customers find what they need every step of the way.”

Firms signing up to the service need to follow a set of steps: first to identify the site or sites to search, and select either all or selective searching of content; second to add a search box and customise the appearance by adding logo and matching the site’s look and feel and finally to further customise search results with refinements that reflect site content.

by Sara Yirrell

Microsoft gives details on Xbox 360 flaws

Microsoft has revealed details about the problems suffered by its Xbox 360 consoles, and the reasons for its recent warranty extension.

Regional vice president of Xbox EMEA, said that the so-called 'three red light problem' is triggered, not by a single fault, but by a combination of factors that would not affect all machines.

"There are a number of issues that are related to this problem. It is not a single flaw," he explained.

"The three red lights come from not just one problem, but the manifestation of a number of issues. It is only when a number of issues collaborate that the fault occurs."

Lewis declined to detail the exact cause of the problem. However, it appears to be a hardware rather than software flaw, since any fix will not be retrofitted to existing machines.

Microsoft confirmed that the warranties on Xboxes were being extended for three years, but only to deal with this specific problem.

Old lady surfing Web at 40 gigabits-per-second

STOCKHOLM, Sweden (AP) -- She is a latecomer to the information superhighway, but 75-year-old Sigbritt Lothberg is now cruising the Internet with a dizzying speed.

Lothberg's 40 gigabits-per-second fiber-optic connection in Karlstad is believed to be the fastest residential uplink in the world, Karlstad city officials said.

In less than 2 seconds, Lothberg can download a full-length movie on her home computer -- many thousand times faster than most residential connections, said Hafsteinn Jonsson, head of the Karlstad city network unit.

Jonsson and Lothberg's son, Peter, worked together to install the connection.

The speed is reached using a new modulation technique that allows the sending of data between two routers placed up to 1,240 miles apart, without any transponders in between, Jonsson said.

"We wanted to show that that there are no limitations to Internet speed," he said.

Peter Lothberg, who is a networking expert, said he wanted to demonstrate the new technology while providing a computer link for his mother.

"She's a brand new Internet user," Lothberg said by phone from California, where he lives. "She didn't even have a computer before."

His mother isn't exactly making the most of her high-speed connection. She only uses it to read Web-based newspapers.

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SMEs turn to the web for better business

Just over half (52%) of the UK’s small to medium sized enterprises (SMEs) now use the internet as the primary channel to promote their company and to communicate with partners, according to a research report from BT Business.

Despite this, the Small Businesses and the Internet report highlights that 40% of the UK’s SMEs companies still do not have a dedicated company web site, and 21% have no online presence at all. This was particularly true for sole traders, where half (48%) have no web presence to speak of.

Three quarters of businesses (74%), see the internet as playing an important role in achieving their goals in the next five years, with 63% believing that it allows them to compete with bigger players and in different markets.

The research also showed that more than half of respondents (57%) believed that the world of business has become less personal as a result of technology and 15% of SMEs never trust the companies that they meet on the internet.

Even though the overwhelming majority of SMEs, over four in five, generally trust the people online, the research revealed it depends on the web site and the experience they have. In addition to this, 90% of SMEs sampled said they preferred working with companies that were recommended to them.

Recommendations are also important in generating revenue, with more than half of SMEs (52%) seeing a significant proportion of their new business (up to half) coming through referrals. For 32%, three quarters of their work was referred.

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E-skills launches new IT guide for small businesses

E-skills has launched a business IT guide to help small businesses make the most of IT.

The ICT Yorkshire Business IT Guide aims to help smaller firms increase their productivity and competitiveness through better use of technology.

E-skills said the guide will help businesses understand what techonlogy is relevant to their particular organisation, and support them in implementing it.

Topics covered include developing a website, implementing security, investing in hardware and software, manage communications, and using technology to enhance sales and customer relationships.

The guide will firstly be available in South Yorkshire through Yorkshire Forward and Business Link.

Karen Price, chief executive at e-skills, said many smaller firms do not know where to go for impartial advice on introducing new technology. "Technology has the power to improve efficiency, open up new markets and enhance customer service. But for many smaller firms it can be difficult to know where to start."

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