Microsoft Riding High in the Wake of Windows 7 Launch

It was everything the Windows Vista launch wasn't: low-key and yet confident. And in many ways, the Windows 7 launch thus matched the tenor of the product itself—a product that, in the words of one Microsoft PR person, "doesn't need a big splash because it sells itself."

Indeed it does. With consumers around the world lining up in front of retail stores last Thursday to be among the first to purchase boxed copies of the product, Windows 7 came racing out of the gates. There was a palpable, even enthusiastic reaction to the event everywhere, and while reviews are universally positive—even from the infamous Apple-loving toadies in mainstream media—the most important and positive reactions this time came from the people who tested Windows 7 over the previous several months.

Over 90 percent of people who tested the beta or release candidate versions of Windows 7 described the product as "good" or "extremely good" and would recommend it to others. And get this: A whopping 80 percent of testers who identified themselves as Mac users said that they, too, would recommend Windows 7. Somewhere, a badly beaten Snow Leopard is licking its wounds.

Most telling for the future was Microsoft's quarterly earnings announcement. Normally, the software giant would have announced its results Thursday after the closing of financial markets. But instead of stepping on the Windows 7 launch, the company decided to wait until the next morning.

This delay triggered fears that Microsoft was about to drop another bad-news bomb on the market, and since the results were for the quarter just before its biggest product launch in almost a decade, such an outcome would have been at least understandable.

But that isn't what happened: Microsoft defied all analyst expectations with financial results that gave the company's stock a sudden and welcome boost. Microsoft recorded a profit of $3.57 billion on revenues of $12.92 billion, both down from the same quarter a year ago but better than expected.

Most notable was a $1.47 billion revenue deferral related to Windows 7. This figure represents 50 percent of the revenues Microsoft had recorded for a product that hadn't even shipped yet. So Windows 7 has already accounted for $3 billion in revenue, or almost 25 percent of the company's overall revenues for the quarter.

Here in New York, where I'm still recovering from the after-effects of the various Windows 7-related celebrations I've attended, Microsoft's latest OS still looms large, with building-sized advertisements around the city and even a bright, animated Windows 7/Toshiba ad on the Times Square New Year countdown ball.

So, congratulations Microsoft. For the first time in a long time, you got everything right.