The VAR Guy

Even as Microsoft’s Windows business slips slightly, there’s good news for channel partners that focus on Microsoft’s server applications — brands like Microsoft Lync, Dynamics CRM, SharePoint and Exchange. Indeed, sales of those four applications drove roughly 30 percent of Microsoft business division growth in Microsoft’s most recent fiscal year. But are Microsoft Partner Network members — and investors — getting the message?

On Wall Street, Microsoft shares are essentially flat today. Microsoft delivered record Q4 results yesterday but some pundits are worried about Windows sales falling 1 percent in Q4. Heck, it’s never good news when a huge cash cow shows signs of slowing down. But channel partners need to look beyond the Windows distractions and focus on business applications, where Microsoft’s revenues continue to accelerate.

According to a July 21 earnings call transcript from Seeking Alpha, Microsoft GM of Investor Relations Bill Koefoed said:

“We launched Office 2010 one year ago, and for the year, the business division’s revenue increased to over $22 billion, an increase of 16%. Lync, SharePoint and Dynamics all continued to grow double digits this quarter. Within our Dynamics business, which grew 19%, we saw strong growth and share gains across products. We added 300,000 new seats on Dynamics CRM, and now, 2 million users leverage Dynamics CRM every day.”

Also on the earnings call, according to Seeking Alpha, Microsoft CFO Peter Klein added:

“Our financial results reflect Office 2010′s outstanding market reception. Deployment remains 5x faster than the previous version. Customers are also adding our business productivity applications, including Exchange, SharePoint, Lync and Dynamics to their multiyear agreements. These 4 products collectively drove approximately 30% of the business division’s growth this year.”

It’s a familiar theme from Microsoft: Connect the established Office brand to server applications. Generally speaking, Exchange and SharePoint are firmly established in the channel. But plenty of partners may be underestimating Microsoft Dynamics. Plus, there are clear signs that Microsoft Lync — a unified communications software platform — will become Microsoft’s next billion-dollar business.

Many Wall Street analysts and plenty of media pundits — including The VAR Guy — sometimes beat Microsoft up for its failures in the tablet and smartphone markets. Perhaps channel partners should ignore the controversial headlines and focus on Microsoft’s growing server applications business. Lync, SharePoint, Exchange and Dynamics seem to be four safe bets for continued partner growth.

Read More About This Topic

• Has Steve Ballmer Fixed Microsoft?
• Microsoft’s Partner Strategy: Jon Roskill On the Record
• Microsoft Q1 Earnings: Windows Server, Dynamics Lead the Way
• Microsoft Launches Two Separate UC Competencies
• SaaS: Microsoft Pitches Office 365 To Large Enterprises