Microsoft sees strong Office growth potential

By Daisuke Wakabayashi

NEW YORK (Reuters) - Microsoft Corp. (MSFT.O: Quote, Profile, Research, Stock Buzz) said on Wednesday the growth opportunity for its Office software division is better than it was seven years ago, because the company is positioned to expand into new business areas.

The traditional Office segments of spreadsheets and word processing may be slower-growing, but new businesses like Internet-based corporate phone systems and data-crunching applications offer new opportunities, said Jeff Raikes, president of Microsoft's business division.

Speaking at the Reuters Global Technology, Media and Telecoms Summit, Raikes said Microsoft is expanding into a broader segment of business desktop software, or what Microsoft calls information work.

Raikes, who heads up Microsoft's biggest unit, accounting for nearly a third of revenue, said its growth opportunities are "absolutely" better now than when he took over the business in 2000.

"What you've seen is a focus on our part to expand into a broader portion of information work," said Raikes in a video conference with reporters.

When asked if those potential opportunities would boost the division's growth rate over the next few years, Raikes said it would boost growth in absolute terms but comparing to historical levels would be difficult since the $14 billion division is much bigger now.

Microsoft's Windows division and its Office unit account for more than half of its sales and nearly all of its profit.

Increasingly, Microsoft is using Office as a platform to build upon for other applications. The company's Dynamics line of business software and its upcoming business intelligence products incorporate Office applications.  Continued...