Microsoft 2015 Annual Report Download - page 14

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13
Search and display advertising includes Bing, Bing Ads, MSN, and Xbox ads. We have a partnership with Yahoo! in
which we provide algorithmic and paid search platform for Yahoo! websites worldwide. In June 2015, we entered into
agreements with AOL and AppNexus to outsource our display sales efforts.
Office 365 Consumer is designed to increase personal productivity through a range of Microsoft Office programs and
services delivered across multiple platforms via the cloud.
Studios designs and markets games for Xbox consoles, Windows-enabled devices, and online. Growth depends on
our ability to attract new users and increase engagement by developing a deep library of content that consumers
seek.
We acquired Mojang Synergies AB (“Mojang”), the Swedish video game developer of the Minecraft gaming
franchise, in November 2014. The addition of Minecraft and its community enhances our gaming portfolio across
Windows, Xbox, and other ecosystems besides our own.
Competition
We face competition for our Resale products and services from various online marketplaces, including those
operated by Amazon, Apple, and Google.
Our search and display advertising business competes with Google and a wide array of websites, social platforms
like Facebook, and portals like Yahoo! that provide content and online offerings to end users. Our success depends
on our ability to attract new users, understand intent, and match intent with relevant content and advertiser offerings.
We believe we can attract new users by continuing to offer new and compelling products and services.
Competitors to Office 365 Consumer are the same as those discussed above for Office Consumer.
Competitors to Studios and Mojang are the same as those discussed above for our Xbox gaming and entertainment
business, as well as game studios like Electronic Arts and Activision Blizzard.
Commercial
Our Commercial segments develop, market, and support software and services designed to increase individual,
team, and organizational productivity and efficiency, including simplifying everyday tasks through seamless
operations across the user’s hardware and software. Commercial is made up of the Commercial Licensing and
Commercial Other segments.
Commercial Licensing
The principal products and services provided by the Commercial Licensing segment are: server products, including
Windows Server, Microsoft SQL Server, Visual Studio, System Center, and related Client Access Licenses (“CALs”);
Microsoft Office for business, including Office, Exchange, SharePoint, Skype for Business, and related CALs (“Office
Commercial”); volume licensing of the Windows operating system, excluding academic (“Windows Commercial”);
Microsoft Dynamics business solutions, excluding Dynamics CRM Online; Windows Embedded; and Skype.
Our server products are designed to make information technology professionals and developers and their systems
more productive and efficient. Server software is integrated server infrastructure and middleware designed to support
software applications built on the Windows Server operating system. This includes the server platform, database,
business intelligence, storage, management and operations, virtualization, service-oriented architecture platform,
security, and identity software. We also license standalone and software development lifecycle tools for software
architects, developers, testers, and project managers. Revenue comes from purchases through volume licensing
programs, licenses sold to OEMs, and retail packaged product. CALs provide access rights to certain server
products, including Windows Server and SQL Server. CAL revenue is reported along with the associated server
product.
The versions of Office in Commercial Licensing are designed to increase personal, team, and organizational
productivity through a range of programs, services, and software solutions. Office Commercial revenue is mainly
affected by a combination of the demand from commercial customers for volume licensing and software assurance
and the number of information workers in a licensed enterprise. Office Commercial revenue growth depends on our
ability to add value to the core product set and to continue to expand our product offerings in other areas such as
content management, enterprise search, collaboration, unified communications, and business intelligence. CALs
provide access rights to certain Office Commercial products, including Exchange, SharePoint, and Skype for
Business, formerly Lync. CAL revenue is reported along with the associated Office product.