Microsoft has just released its Q1 figures, showing that not only was the launch of Office 2010 a major commercial success for the company, but also, that Windows 7 is the fastest selling operating system in history.

Overall, the company reported profits of US$ 5.41bn, up from US$ 3.57bn in the same period last year. The report indicated a jump of 51% in one year, which Microsoft (news, site) says is the result of the PC refresh cycle, precipitated by the release of Windows 7, and the business investment interest in Office 2010.

This was an exceptional quarter, combining solid enterprise growth and continued strong consumer demand for Office 2010, Windows 7, and Xbox 360 consoles and games . . .” said Peter Klein, chief financial officer at Microsoft.

Highlights from the figures show that:

  • Office 2010 recorded 15% growth in Q1 over previous Office revenue in its first full quarter
  • Windows 7 has sold 240 million licenses
  • Xbox 360, once a major revenue black hole, grew 38%

It also says that Bing has continued to expand its market share.

We are seeing improved business demand and adoption. Our enterprise agreement rates were strong, reflecting business commitment to Windows 7, Office 2010, and our server and database products . . .” said Kevin Turner, chief operating officer at Microsoft.

Windows 7

Of more importance is Microsoft's prediction of a continuing PC refresh cycle in the coming months. While emerging PC markets are doing better than ‘mature’ markets, this trend is set to continue with a good deal of growth left in Windows 7.

Earlier in the week, Microsoft announced that the final production versions of SP1 (Service Pack 1) will be released early next year and with no major changes expected, and little in the way of new features, this is practically the finished code that enterprises can deploy.

The result is that many enterprises, who have been waiting for the release of Windows 7 SP1 before upgrading can do so once it is released, resulting in another potential surge in sales for Windows 7. Already for this quarter, Microsoft reported revenues of US$ 4.79 billion for Windows and Windows Live, compared to the US$ 4.35 billion during the same period last year.

Office 2010

The other major performer was Office 2010, launched to businesses in May and to the public in June. Stephen Elop, president of Microsoft’s business division described it as “the most extensive beta the company has ever been involved with."

Microsoft marketed Office 2010 and SharePoint 2010 as productivity tools and at the time of the launch said that they would save up to two weeks of time for each user annually.

The result has been many businesses buying into Office 2010, where most of the Office 2010 sales to date have been.

Overall, Microsoft's Business Division reported US$ 3.9 billion in operating income versus US$ 5.13 billion in revenue, a 14 percent jump in revenue, with double-digit growth for SharePoint, Lync, Dynamics CRM and Exchange.