Microsoft on a Roll

Client software, which accounted for 37% of revenue in the quarter, surged 67% in the quarter, thanks to Vista sales. Business software, about one-third of total revenue, gained 34%.

"There were some questions about how well Vista and Office 2007 would be received, and they've been very well received," said Tracy. "The client business was approximately $400 million higher than our guidance, and the business division was about $200 million higher."

Microsoft said there is little sign of growth slowing dramatically. In its first formal guidance for the fiscal year ending June 30, 2008, the company said revenue will come in between $56.5 billion and $57.5 billion, which translates into annual revenue growth of 11% or 12% over the current fiscal year.

The consensus among analysts had forecast revenue of $56.2 billion.

"I think some people think that Microsoft is not a strong growth company," Tracy said. "I'd like them to step back and look at our fiscal 2008 guidance. They might see 11% or 12% growth and say, 'Gee, that's pretty good.' "

But they're missing what Tracy says is the real story: "If they look at absolute fiscal dollars, that's revenue growth of more than $5 billion," he said. "That growth in itself is big enough to land you on the Fortune 500 list."

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