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Microsoft sees IT spending remaining healthy

Amid strong quarterly earnings, Microsoft said it is seeing signs of strength in enterprise spending, particularly in software.

While many businesspeople are worrying about a possible recession, Microsoft says it sees its part in the economy remaining strong.

In a telephone interview on Thursday, Colleen Healy, Microsoft's general manager of investor relations, said that the company booked a greater amount of future revenue than it had expected, taking in about $500 million more than planned in its "unearned revenue" column. That comes on top of the record results for the quarter that ended December 31.

"From our perspective, we are expecting IT spending to remain stable," Healy said. "Software, in particular, remains healthy, and our ability to capture IT budgets looks good."

Healy said some of the bookings appear to be early indications of demand for its coming server and tools products, including Windows Server 2008.

On the consumer side, Healy said that both the Xbox and the Zune had a good holiday quarter. Microsoft has now sold 17.7 million Xbox 360s. Healy did not give a Zune figure, but said, "We had a good holiday season, positioning ourselves as the clear alternative to the iPod."

Microsoft also continues to see gains from reducing piracy rates of Windows, Healy said. In the past quarter, about 3 percentage points of Windows sales growth was due to reduced piracy, she said.

The company is also benefiting from a larger number of customers opting for high-end versions of Vista, as opposed to the basic edition, with premium options accounting for three out of every four Vista copies sold.