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The world’s largest software maker Microsoft Corp. (MSFT - Analyst Report) is gradually becoming popular in educational institutions across Europe. Its Office 365 suite has won several customers such as School Center Skofja Loka (Slovenia), TEI Kalamata (Greece), EDUCATIVA (Romania), Kozminski University (Poland), Faculty of Economics and Business (Slovenia), University of Maribor and Vaikystes Sodas (Lithuania).

The suite won on different counts at these institutions. While School Center Skofja Loka wants to increase its visibility in the education sector, employees at EDUCATIVA want to efficiently respond to thousands of emails about its products and services. TEI Kalamata is deploying Office 365 to efficiently manage funds and resources to research. Kozminski University wants to keep in touch with their students even when they graduate from the University. University of Maribor wants to install Office 365 to increase communication and collaboration with its strong base of 4,000 students and professors.

The Office 365 suite equips these organizations with advanced technologies, thereby improving operational efficiency and resource allocation. Not only does it facilitate communication and collaboration among the organisations, but also reduces their IT expenses.

Office 365 is sold as a service and therefore, generates ongoing revenues for Microsoft instead of a one-time licensing fee. Launched in Dec, 2011, the new Office comes with the traditional word processing, spreadsheets and email programs.

 Microsoft’s Office 365 is gaining traction in the market as it recently launched its online version focusing on touch devices. Further, it is being deployed at the stores of retailers such as J. C. Penney Company Inc. (JCP - Analyst Report) and U.K.-based Tesco as well as government departments such as the Texas Department of Information Resources, which chose the software for inter-departmental activities. The latest to jump on the bandwagon is the International Federation of Red Cross and Red Crescent Societies (IFRC), which also signed a MoU with Microsoft. Further, Microsoft’s software is gaining ground in the healthcare sector. The company continues to innovate, launching separate versions for businesses and student communities. 

Currently, just like other PC makers, Microsoft is also battling the slump in the PC market caused by the sluggish economy. In addition, the popularity of smartphones and tablets from Apple (AAPL - Analyst Report) and Google are cannibalizing PC market sales, further deteriorating the scenario. Whether it can come out of the slump on the back of its new software and OS is a wait-and-see game.

Microsoft reported revenues excluding deferrals of $20.49 billion in the third quarter of fiscal 2013, which was down 4.5% sequentially and up 17.7% from last year, more or less in line with our estimates. All segments grew strongly from the year-ago quarter and declined only slightly from the seasonally strong December quarter. Microsoft’s Business Division grew both sequentially and year over year.

Microsoft has a Zacks Rank #4 (Sell).

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