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Microsoft CFO Says Product Blitz Heating Up

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As the rest of the economy begins to reawaken, Microsoft’s prospects for the next couple of years are starting to look a bit like the good old days.

That was the prognosis Microsoft’s new CFO, Peter Klein, presented to financial analysts on Tuesday at the Morgan StanleyTechnology, Media & Telecom Conference.

Klein, an eight-year company veteran, replaced former CFO Chris Liddell late last year.

In January, Microsoft announced record sales and earningsfor its second quarter of fiscal 2010, which ended Dec. 31. At that time, executives credited hefty sales of Windows 7, which shipped during the quarter, for much of the turnaround in the company’s fortunes.

Now, with all the enterprise products warming up in the bullpen, Microsoft is hoping for repeat performances for the next few quarters.

Besides strong sales of Windows 7, which have now passed the 90 million mark, the company is gearing up for a strong “refresh” market of new PCs for corporate customers. Consumers have accounted for most Windows 7 sales to date. However, once the refresh cycle starts, new PCs entering enterprise shops will most likely arrive with Windows 7 already installed.

“There will be an enterprise refresh cycle [and] we expect it to happen this calendar year and go into the next calendar year,” Klein told the analysts.

Further fueling Microsoft’s expected enterprise sales are other pending products, including Office 2010, Visual Studio 2010, SharePoint 2010, Exchange Server 2010 and SQL Server 2008 Release 2 (R2).

Office, for instance, is Microsoft’s single largest cash generator, and the latest, version 2010 — out to 4.5 million beta testers right now — is due out in June. Additionally, Microsoft just went commercial with its Windows Azure cloud computing platformand began charging for those services last month.

“We’ve got a great pipeline [of products] coming, which leaves us well-positioned in 2010 and 2011 as the enterprise [market] comes back,” Klein said. “That’s a lot of products in a six-month time frame,” he added.

In addition, Microsoft has more products queued up for later in calendar 2010, such as “Project Natal,” the company’s game controller for Xbox 360 that uses cameras to turn the user into the actual game controller. Natal is due out in time for the holiday salesseason.

Also coming in the pipeline will be the recently-unveiled Windows Phone 7 Seriesphones, the first of which are due out in time for the holidays.

“The timing is very good for us,” Klein said.

Stuart J. Johnston is a contributing writer at, the news service of, the network for technology professionals.

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