MBD revenue increased reflecting sales of the 2010 Microsoft Office system, which was released primarily during the fourth quarter of fiscal year 2010, as well as the $305 million Office Deferral during the three months ended March 31, 2010. Consumer revenue increased $525 million or 95%. Excluding the impact associated with the Office Deferral, consumer revenue increased $220 million or 26% due to sales of the 2010 Microsoft Office system. Business revenue increased $386 million or 10%, primarily reflecting licensing of the 2010 Microsoft Office system to transactional business customers, growth in multi-year volume licensing revenue, and a 10% increase in Microsoft Dynamics revenue.
MBD operating income increased due mainly to revenue growth, offset in part by higher operating expenses. Sales and marketing expenses increased $150 million or 16%, due mainly to increased corporate and cross-platform marketing activities and charges related to intangible assets. Cost of revenue increased $80 million or 24%, primarily driven by higher online costs, costs of providing services, and increased amortization of capitalized software development costs. Research and development costs increased $58 million or 13%, primarily as a result of capitalization of certain Microsoft Office system software development costs in the prior year.