) recently won a three-year Joint Enterprise Licensing Agreement
for its latest software from the U.S. Department of Defense
(DoD). The $617.0 million contract will cover 75% of the defense
personnel from the U.S. Army, U.S. Air Force and Defense
Information Systems Agency (DISA).
As per the agreement, the software maker will provide the
latest versions of Windows 8 OS, Microsoft Office 2013 as well as
SharePoint 2013, a file-sharing platform, and will cover 1.5
million of the Pentagon's computers.
A few months back, Microsoft won a separate 3-year software
licensing agreement worth $700.0 million from the U.S. Navy.
The latest agreement will provide all the three departments
the benefits of accessing the latest Microsoft software and tools
to DoD's large workforce of servicemen. The agreement will open
up a new channel of communication (SharePoint 2013), through
which sensitive business intelligence and reports can be
transferred among the servicemen at a faster rate. Similarly,
Microsoft Office 2013 and Windows 8 OS will equip the personnel
with the productivity tools required in their daily professional
Microsoft claims that since the launch of its Windows 8 OS,
60.0 million licenses have been sold. These may not be very
strong numbers for the world's leading OS but given the radical
changes made by Microsoft in this version, consumers will take
some time to adapt and adopt. This is what is slowing down sales.
Therefore, a gradual uptick in 2013 may be expected, which will
of course be tempered by PC market sluggishness.
Microsoft has been battling the slump in this market, impacted
by an uncertain global economic climate. Further, smartphones and
) have been cannibalizing PC market sales. Thus, winning such
defense contracts from the government may ease some pressure on
Microsoft going forward.
Microsoft reported revenue, excluding deferrals, of $16.01
billion in the first quarter of fiscal 2013, down 11.4%
sequentially and 7.9% from the year-ago period. Revenues also
missed the consensus by 2.5%.
Microsoft, Apple and Google all have a Zacks Rank #3
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