<Would it have been effective competition in anyone's hands?>
Look Dan, read what I wrote (and don't be so touchy, I just answered your question), it could have been competitive. If a company is able to purchase assets cheaply enough, significant shifts in power can occur, especially when on the verge of a paradigm shift. Novell is a larger company than Corel (I think - at the time) and Corel did with Wordperfect what no one else could - successfully challenge MSFT in the suite business. I am not trying to say it is easy, but it defintiely could be done. If the buyers of Money could have gotten it for a dime, they could have offered below market prices to banks and brokerages which would have felt threatened by MSFT's power (very much the same way NSCP and Corel are currently strategizing). With the benefit of hindsight, this would have been even more destructive to MSFT since MSFT was quite late to jump on the Internet bandwagon. With below market (yet legal, breakeven) prices, reduced even farther by the efficiences of the internet, a company (such as RCM) could have really been a thorn in MSFT's side, likely forcing MSFT to attempt a buyback of the business at a significant premium (albeit posing possible antitrust concerns).
The scenario could go something like this. Offer a below market price package (signifincantly below many of the then present institutions breakeven - a gift that's hard to refuse) of administrative and front end tools as well as the typical Intuit/Money stuff, to the customers of the brokerages and financial intstutions most directly threatened (Charles Schwab wtih thier Equalizer personal trading and finance package and their One Source Fund Program, nearly all of the commercial banking instutions, Merrill Lynch and like, no load funds such as Fidelity, and life/health/personal lines insurers and agencies - Prudential, Metropolitan, Equitable, etc.).
Knowing that MSFT would have the advantage of packaging everything in Windows, you simply allow all of your customers (who each have tens of thousnads of clients) to distirbute and download your front end user interfaces for free (like NSCP and AOL). This has, even back then, proven to be very effective aginst MSFT and their Windows monopoly (again refernce AOL vs. MSN and NAV vs. IE). Structure the package as to include enticing and significant contractual revenue and cash flow sharing (something MSFT is unlikely to do, they would probablay charge transaction fees according to Bill, which could allow them to get very greedy, very much like the per processor deal). Allow shared access to their end user database (very, very important for marketing and the second biggest fear the banking institutions had for they would fear the loss of direct contact with the consumer due to the ultra-efficient software middleman, the primary fear is that they could not match MSFT's efficiency in costs, modems are much cheaper than mortgages to maintan and banks traditionally owned the property they did business out of. B. Gates would have placed the statutory reserves, capital and surplus down with a bank of modems and started business while outsourcing labor intensive administrative work with his savings. He also would have financed reserves and statutory capital in cash, eliminating the cash flow robbng debt service many of his competitors would have had.) With more of a partnering package, internet technology (?), and sharp management, MSFT could defintely have been challenged. Beaten , who knows, but challenged yes. B. Gates knows this but realized it was more efficient for him to buy rather than to invest internally. The purchaser of the undervalued asset would have been in a different situtation. |
