Microsoft delivers a strong FY20 Q1 for Windows 10 commercial ahead of Windows 7's demise

Myerson Windows 10
Myerson Windows 10 (Image credit: Daniel Rubino / Windows Central)

What you need to know

  • Windows 10 commericial did very well for FY20 Q1.
  • Windows 7 EOL drove higher adoption of Windows 10 Pro.
  • Consumer OEM rev was down, but within projections.

Microsoft promised investors another solid quarter of Windows 10 revenue, and today the company delivered.

Microsoft's quarterly results for the fiscal year 2020 revealed $11.1 billion in revenue for its More Personal Computing division, which includes Windows OEM, Windows Commercial products and cloud, Bing, Xbox, and Surface revenue. That $11.1 billion is up 4 percent and in line with projections.

Breaking the numbers down further, Windows OEM Pro revenue grew 19 percent for the commercial PC market. Microsoft cites "strong demand" for windows 10, but it is mostly the momentum behind Windows 7's end of support ahead of January 2020. Many companies are buying new PCs and laptops with Windows 10 to gain many of its security features and conveniences like Windows Hello.

Non-Pro Windows grow dipped 7 percent as consumers are not feeling the same pressure to upgrade hardware as enterprise. Microsoft cites "continued pressure n the entry-level category," which likely translates to increased competition from Google and Chromebooks.

Capping it off is Windows Commercial products and cloud services revenue. As expected, that area grew by double-digits at 26 percent. Microsoft cites an increase in Microsoft 365 agreements, which lock companies into contracts with guaranteed revenue.

The good news is Microsoft is still going strong with business, enterprise, and cloud. But for consumers, this quarter was down slightly, but well within what Microsoft's guidance to investors delivered in July. Microsoft's guidance last quarter was, "Surface revenue will decline slightly year over year driven by product lifecycle transitions." Likewise, for gaming and Xbox: "We expect revenue in our gaming business to be down slightly year over year as double-digit growth in Xbox Software and Services will be offset by declining console sales.

It will be interesting to see what Microsoft projects for next quarter. With Windows 7's support ending, the significant increases in Windows 10 commercial sales will likely settle again to just above consumer purchases.

We'll update this article as more information becomes available.

Daniel Rubino

Daniel Rubino is the Editor-in-chief of Windows Central. He is also the head reviewer, podcast co-host, and analyst. He has been covering Microsoft since 2007, when this site was called WMExperts (and later Windows Phone Central). His interests include Windows, laptops, next-gen computing, and watches. He has been reviewing laptops since 2015 and is particularly fond of 2-in-1 convertibles, ARM processors, new form factors, and thin-and-light PCs. Before all this tech stuff, he worked on a Ph.D. in linguistics, watched people sleep (for medical purposes!), and ran the projectors at movie theaters because it was fun.