Bill, the San Jose Mercury News put what you might call a neutral slant on the Microsoft annual briefing for financial analysts held yesterday. This paper, lovingly called the Murky News by some I know around here, generally trashes high tech whenever they can. Go figure that one, as a huge amount of their subscriptions and advertising come from high tech because of their location in SI Valley.
mercurycenter.com
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Posted at 9:21 p.m. PDT Thursday, July 22, 1999
Microsoft charts tried,
true course
BY MIGUEL HELFT
Mercury News Staff Writer
SEATTLE -- For top Microsoft Corp. executives, the
future of the information revolution will be about
empowering people any time, any place and on any
device. But for now, the central focus will remain
mostly on the personal computer.
If there wasn't much new about Microsoft's
PC-centric vision for the coming year, which
officials laid out Thursday during the company's
annual briefing for financial analysts, perhaps there
didn't need to be. That formula has propelled
Microsoft to unprecedented success and prosperity.
Still, Microsoft officials said they'll continue to
branch out with software that powers a range of
other devices, from television set-top boxes to
cellular phones.
And they repeated warnings that the company will
not be able to sustain the dizzying growth rates that
have pushed its market value to around a half-trillion
dollars. The 200 or so analysts present appeared
skeptical of that claim, however. An informal poll
taken in the morning by Carla Lewis, Microsoft's
senior director of investor relations, showed that 44
percent of them expected Microsoft's sales to soar by
25 percent or more in the current fiscal year.
``I was shocked at Carla's poll,' said Steve Ballmer,
Microsoft's president. ``Twenty-five percent? Come
on. It is outlandish and crazy.'
On Monday, Microsoft reported a 29 percent growth
in sales for fiscal 1999, compared with 1998.
Ballmer noted that further growth of 25 percent or
higher would mean roughly a $5 billion increase in
sales.
``How many software companies exist at $5
billion?' Ballmer asked rhetorically. ``I encourage,
in my own gentle way, a little bit of caution.'
Officials said Microsoft faced a number of risk
factors, from a possible decline in PC shipments, to
a saturation of the office market, to the year 2000
computer problem and global economic uncertainty.
And they said Microsoft faced increased pressure
from a number of technological shifts including the
free Linux operating system, software being
delivered as a service over the Internet, new
devices, and increasingly cheaper PCs.
In terms of technology vision, company officials
including Ballmer, CEO Bill Gates and others
heralded the advent of new PC forms, and
showcased a number of technologies from new
features for their MSN group of Internet sites to the
Windows 2000 operating system for corporate users.
But the executives continued to emphasize the PC as
formula for Microsoft's success.
``Over all these years, where have we had our
greatest success is with knowledge workers,' Gates
said. ``That is really a central thing for us.'
Gates went on to talk about how technology can
make information flow inside businesses more
efficiently, repeating many of the concepts laid out in
his recently published book, ``Business @ the Speed
of Thought.'
Much of the day was spent showcasing technologies
that would let Microsoft's products run on everything
ranging from powerful server computers to palm-size
PCs -- what Gates called a Windows Web-centric
platform.
``Although we think PCs will remain the central
device of the information revolution, we certainly
admit that there will be (a number of) other devices,'
Ballmer said.
Microsoft officials also noted that they will invest in
sprucing up the company's money-losing Internet
efforts. ``We still have a lot of room for
improvement,' said Brad Chase, vice president of
the consumer and commerce group.
Microsoft officials also acknowledged an issue that
has come with the company's success: employees at
all levels, flush with Microsoft's valuable stock,
have left the company.
But Bob Herbold, Microsoft's chief operating
officer, dismissed concerns that such departures
would affect the company, showing graphs that put
Microsoft's retention rate above the computer
industry's average. Herbold also said the company is
busy developing internal candidates to fill the shoes
of those who left.
Tony |
