TightWind is written by Kyle Baxter. Stay Hungry. Stay Foolish.

Microsoft didn’t do so well last quarter:

The software company, based in Redmond, Wash., said net income for its fiscal first quarter which ended Sept. 30, dropped 22 percent to $4.47 billion, or 53 cents a share, compared to $5.74 billion, or 68 cents a share, for the year-earlier period.

Windows revenue dropped 9 percent and revenue from the division which is responsible for Office dropped 2 percent. IDC reported that PC shipments dropped by 8.6 percent in the same quarter.

Some of this is absolutely due to Windows 8′s impending release, but it’s also clear that the PC market is in decline and Microsoft’s revenue and income is along with it.

Microsoft is releasing Windows 8 and Surface from a position of weakness. It must be a success, because while the traditional PC will continue to sell well for years, there’s no growth left in it. It’s hit the high water mark. Growth, today, is in mobile—smartphones and tablets—and Microsoft’s smartphone business is terrible. They’ve been left behind and now they have to catch up.

Windows 8 is not only a transition for Windows, but it’s a transition for Microsoft as a company. This is the point where they have to move from sitting back and minting cash from the PC sales, and try to create a new future for their company.