Microsoft makes its case to Wall Street

REDMOND, Wash.--Microsoft kicked off a daylong meeting with analysts on Thursday as the company looks to reassure investors that its future is as bright as its past.

The company began the event touting its recent quarterly results which resulted in double-digit revenue growth in all of its business segments and noting that Windows 7 has now sold 175 million copies.

"That was a great result for us," said Bill Koefoed, general manager of investor relations for the software giant.

Ahead of the meeting, Microsoft announced a trio of cloud-computing deals, noting that Dow Chemical, Hyatt Hotels, and the University of Georgia will all be using the company's hosted versions of Exchange and other business productivity software.

CNET will have live coverage of the meeting throughout the day. The day is scheduled to be split between morning presentations from COO Kevin Turner and Chief Research and Strategy Officer Craig Mundie. Then, for much of the morning, analysts will have a chance to see some of Microsoft's products and schmooze with executives. Things kick off again at 1 p.m. PDT, with CEO Steve Ballmer.

Update 8:35 a.m.: Koefoed tries to make the case that Microsoft is more than just Windows and Office, while suggesting it is also not spread too thin. Rather, he suggests Microsoft has eight key businesses. On his list are: Xbox and TV, Bing, Office, Windows Server, Windows Phone, Windows, SQL Server and other software for business users.

Many of these businesses, he said, have natural extensions in the world of cloud computing, with products like Windows Azure, SQL Azure, Microsoft's online business software, and Bing and Windows Live.

8:45: Turner has taken the stage to talk about sales to businesses. "We wouldn't say we've recovered as it relates to the global macroeconomy...but we would tell you we see things getting much better," he said.

For the coming year, Turner said that Microsoft is shifting its sales efforts to focus on leading with the cloud. In the past, it went with a Burger King-like approach, suggesting it was in the business of telling customers to have it their way.

Ironically, Turner said that the change in approach will probably mean that the company will sell more traditional server software, but it will highlight that the company is serious about moving all of those products to the cloud.

8:58: Turner has a slide up showing that Microsoft is broader than cloud rivals like Google, Salesforce.com, Amazon.com, and VMware when it comes to offering businesses IT services in the cloud. Now he's touting wins, including 70 percent of its cloud wins that were new customers for Microsoft, many shifting from Lotus Notes.

9:05: Turner is talking about the shift from Windows XP and Vista to Windows 7, noting that Windows 7 adoption is coming at a record pace, but that 84 percent of businesses are still on Windows XP or Vista.

"We see these opportunities with these old versions," he said.

Also, Turner said that the company has finally gained some traction in the browser market with Internet Explorer 8, having gained share the last two months after years of decline. The company's beta of Internet Explorer 9 is coming out in September, he said.

"The momentum on that has changed and it's a whole new day," Turner said.

9:10: Turner continues bashing competitors, noting that Microsoft has started to win back customers that had tried Google Apps. "Some of those that had gone are actually coming back and we're welcoming them with open arms," Turner said.

Next he turns to VMware and virtualization, saying that Microsoft has gone from no presence in the market to 15 percent market share in two years, and now has not just a cheaper price but, he suggests, it has a better product as well.

On to Linux. Turner said that during the recent downturn Windows Server had its highest share gain against Linux in company history. In databases, Microsoft said that SQL Server grew 6 percent while IBM lost share and Oracle eked out a gain of less than 1 percent.

"Customers don't want to be locked into Oracle," Turner insisted, saying that Microsoft will pitch itself as a "life preserver" to Oracle customers that don't want to keep on that path.

As for Microsoft Exchange, Turner said that the company has managed to convert 16.3 million seats from Lotus Notes and said that the company has a similar opportunity to grab the rest of IBM's Lotus customers. He continued the rescue metaphor, saying Microsoft can help save customers "stranded on a Lotus Notes island."

9:20: Turner has wrapped up, handing things over to Mundie.

9:30: Mundie is talking about the opportunity to move Azure into other kinds of more private clouds for governments and businesses, pointing to the company's recently announced plan to offer an Azure appliance.

"You'll be able to buy these things and just have them delivered to your parking lot," Mundie said.

Nothing new here so far. He's on to a demo of a previously shown project, code-named Dallas, designed to create a marketplace of data feeds.

Mundie is also talking about the opportunities for computers to work on our behalf, a favorite topic of his. "I think this is going to be incredibly important in cutting through the clutter."

9:50: Mundie is talking about how Microsoft's research efforts in machine learning, speech recognition, parallel computing, computer vision, gesture interface, and other areas make possible its new Kinect controller for the Xbox 360.

"To build this product you had to have them all," Mundie said. "We went essentially from impossible to shipping in about three years.

Next he's showing a prototype of a computer that can do some basic medical triage, a tool Mundie said would be important as the world faces a shortage of trained medical personnel, particularly in developing countries.

With that, Microsoft is hosting a product fair, with the formal meeting resuming at 1 p.m. PDT.