at the end of fiscal 1998.  Windows NT Workstation version 4.0 was released in fiscal 1997.  Although the growth rate of new PC shipments slowed, PC operating systems contributed to revenue growth as shipments of new PCs preinstalled with such systems increased during the three-year period.  Additionally, increased penetration of the higher value Windows NT Workstation led to growth in all three years.  

Windows NT Server is a comprehensive business and enterprise server operating system, combining application, file and print, communication, and Web services.  Windows NT Server version 4.0 was released in fiscal 1997.  Revenue from Windows NT Server increased strongly during each of the three years due to greater corporate demand, particularly for intranet computing solutions.



Productivity Applications and Developer revenue was $5.62 billion, $7.04 billion, and $8.82 billion in 1997, 1998, and 1999.  Products include primarily desktop applications, server applications, and software developer tools.

Microsoft Office integrated suites, including the Standard, Small Business, Professional, and Premium Editions, are the Company’s principal desktop applications and a key driver of revenue growth.  Microsoft Office 97 was released in fiscal 1997 and Microsoft Office 2000 was released at the end of fiscal 1999.  The primary programs in Microsoft Office are the word processor Microsoft Word, Microsoft Excel spreadsheet, and Microsoft Outlook® messaging and collaboration client.  Various versions of Office, which are available for the Windows and Macintosh operating systems, also include Microsoft Access database management program, Microsoft PowerPoint® presentation graphics program, Microsoft FrontPage® Web site creation and management program, or other programs.  Revenue from stand-alone versions of Microsoft Excel, Word, and PowerPoint continued to decrease as the sales mix shifted to integrated product suites. 

Server applications, based on Microsoft Windows NT Server, offer an enterprise-wide distributed client/server, Internet, and intranet environment.  Products include Microsoft Exchange Server, Microsoft SQL Server, and other server applications in the Microsoft BackOffice family of products.  Microsoft Exchange is an enterprise messaging and collaboration server while Microsoft SQL Server is a scalable database and data warehouse platform.  Revenue from these products increased strongly over the three-year period, albeit with slowing growth rates in 1998 and 1999.

Independent software vendors, corporate developers, and solutions developers license tools such as the Microsoft Visual Studio® development system, which includes the Microsoft Visual Basic® development system, to develop software for the Windows operating systems and the Internet.  Revenue from developer products increased moderately in 1997, was flat in 1998, and increased strongly in 1999. 

Although revenue was not significant, preinstallations of Windows CE by OEMs on intelligent devices were strong in 1998 and 1999.



Consumer, Commerce, and Other revenue was $1.40 billion, $1.94 billion, and $2.43 billion in 1997, 1998, and 1999.  This category of product revenue