Server and Tools revenue increased in both product sales and Enterprise Services. Product revenue increased $215 million or 6%, driven primarily by growth in SQL Server, System Center, and Developer Tools, reflecting continued adoption of the Windows platform. Enterprise Services revenue grew $121 million or 13%, due to growth in both Premier product support and consulting services.

Server and Tools revenue for the three months ended September 30, 2012 included an unfavorable foreign currency impact of $77 million.

Server and Tools operating income increased, primarily due to revenue growth, offset in part by higher cost of revenue and increased sales and marketing expenses. Cost of revenue increased $110 million or 12%, primarily reflecting higher headcount-related costs. Sales and marketing expenses grew $48 million or 5%, reflecting increased corporate marketing activities and fees paid to third-party enterprise software advisors.