Q. Why was there "awesome" demand for PC's this summer and fall?
A. There was awesome demand for PC's for 2 reasons IMO.
1. Large corporations needed to upgrade their hardware to meet Y2K requirements. MSFT revenues were helped immensely by Y2K. I know trainers at large corp. insurance companies that are still scrambling to get their 2nd and 3rd tier locals Y2K compliant. A statement was made to me that the software/licenses were procured over the summer but they had to wait for the backlog. IMO this surge will carry over until the end of the year. After 1/1/99 MSFT will have to rely on their products merits for incremental revenue growth. Thats why Win2000 is an absolute must blockbuster for the company. Personally, given ISP's, ASP's, ISV's etc. demands for scalability and reliability, the product will meet tempered demand. For MSFT standards it will be a flop.
2. Cheap PC's. Twist, do you think that while DELL, CPQ, HWP,IBM, and all the PC box makers go down the drain that they will look at BIG BROTHER will a twinkle in their eyes. They will look for a cheaper OS alternative to increase their profit margins, IMO.
IMO this is a blowoff year for MSFT. If Win2000 is not a blockbuster product there will be a sever meltdown is sales, profitablility and stockprice. IMO, that why MSFT is hyping the companies prospects. Now thats contrarian to their philosophy; tell me why they are changing tactics. They want to keep the big mo going.
Later, Bob. |
