Microsoft Looks to the Cloud as Sales of Windows Tumble

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TIME

It used to be that software giant Microsoft could count on its flagship Windows operating system as a big contributor to its bottom line. With Windows bundled on millions of new personal computers, the company could count on a lot of easy money to basically activate the pre-installed software.

But, as reflected in its latest earnings report, Microsoft is feeling the sting of consumers shifting away from PCs, which cuts into the company’s lucrative licensing business model.

Indeed, while the company’s overall sales grew to $21.7 billion for the past quarter from $20.4 billion during the same period last year, its Windows licensing business has taken a hit. Revenue from the business version of Windows dropped 19% while the Windows consumer edition fell 26%.

So what’s picking up the slack? The answer is that nebulous term known as the cloud, which generally refers to companies using their own…

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