Microsoft posts great big, fat profit

DID YOU HEAR the one about the software company everybody wrote off but just turned in a big fat profit for the first three months of the year?

Not it's not a joke, unlike this*, but Microsoft - supposed by many Web 2.0 wibblers to be a company on its deathbed, receiving the last rites and disclosing some uncomfortable truths to Junior about how he came into the world - would appear to be alive and well.

For the first three months of the year, Microsoft had a fat surplus of $4.9 billion, up a whopping 65 per cent over the year-ago quarter on higher-then-expected revenues of $14.4 billion. What caused the jump? That supposed boat anchor, Vista, and the much-mocked dinosaur-cum-dodo, Office.

Think about it. Does a company that is screwed make that kind of dough? Four. Point. Nine. Billion. Dollars. What's that, a billion pints of Guinness? A neverending supply of Timothy Taylor Landlord for you and everybody you ever met. Hey, help yourself to nuts - Microsoft has so much money it just doesn't care.

Think about it again. £4.9 billion. Like winning the lottery every single day. It's bigger than the total value of tons of well-known companies and a lot bigger than the annual revenues of many large-ish companies. Look at a hot stock like Red Hat. Its revenues are $400 million for the year and there lies Microsoft, the big fat giant, slumbering on a bed made of green notes. It's the sort of money that lets you make plenty of mistakes and still remain very, very relevant.

OK, so let's have a look at the negative side, or at least the not-so-positive side.

Apple also delivered a screaming quarter and the analyst numbers suggest that the entire PC sector - in the broader, not just IBM-compatible sense - is in clover, up about 13 per cent here in the rather large region of Europe, the Middle East and Africa. What's driving that? General affluence and cheap kit, especially notebooks. So it's not like it's just Microsoft that's doing OK.

Also, you could argue that Microsoft, and its old pal client/server architecture, is going through the last death throes rather than dancing a merry jig. Maybe, but there's very little evidence that freebie/open-source/on-demand tools are eating its lunch. Microsoft might be hurting in business applications where its Dynamics line has struggled to make inroads, and has several areas where it's a niche player, but core properties are in rude health.

What about the Internet, you shout on your blog nobody reads. Sure, Microsoft's boys are taking a hell of a beating in search with a product that manages to be both plain and ugly at the same time. But it's probably no good at crochet, maintaining tropical fish or predicting the outcome of the 3.30 race at Chepstow. Microsoft has expanded in a lot of ways and some of them, like games consoles, server software and so on have come off while others haven't. You can't be good at everything so you stick to your knitting. And, if you're smart, pass on the crochet after a few stabs at the cardie-with-belt pattern.

Of course, I'm sure that decades ago some other wiseacre was sitting at his kitchen table staring out at the overcast sky in London's red and tranquil labyrinth and writing the same sort of tosh about how Control Data, Burroughs, Sperry, Digital and the rest would never go away. But somebody else can write Microsoft's obituary because, for me at least, reports of its death have been a little exaggerated. µ

*An Englishman, a Scotsman and an Irishman walk into a pub. The barman says, "Is this some sort of joke?"