Sales Of Microsoft Server And App Software JumpSales Of Microsoft Server And App Software Jump

First-quarter revenue from Microsoft's recently created information-worker group shot up 26% on the strength of a new licensing strategy that encourages customers to sign up for long-term upgrade contracts in exchange for discounts. The group is responsible for sales of Office and other productivity apps. This quarter's figures were compared with results for existing products now in the new group.

The software maker also said server revenue jumped 14% during the quarter ended Sept. 30 as more businesses switched from Unix-based machines to Wintel devices.

Overall, Microsoft's revenue totaled $7.8 billion, a 26% rise, "exceeding our expectations," CFO John Connors says. Net income was $2.7 billion, or 50 cents per share, compared with net income of $1.3 billion, or 23 cents, a year ago. Excluding investment write-downs, net income for the quarter was 55 cents per share, compared with 43 cents a year ago.

Microsoft says its businesses solutions group, which is primarily focused on small businesses through software and services from Great Plains, Navision, and bCentral, posted revenue of $106 million, compared with $74 million a year ago. Most of the gains were because of its acquisition of Navision at the beginning of the quarter.

Microsoft also raised earnings estimates for the second quarter from 45 cents to 46 cents on revenue of $8.5 billion to $8.6 billion.