How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 485.92

+0.4%

Dec 19 9:30 AM EST

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To: John F. Dowd who wrote (38233)	2/21/2000 2:52:00 PM
From: Bill Fischofer	Read Replies (1) of 74651

Scale-out vs. Scale-up MSFT has finally found the key to the enterprise with the idea of scale-out. The reason is that scale-out is aligned with the emerging storage-centric IT paradigm. As storage networks move to the center of the enterprise and the former "central processor" moves to the periphery scale-out replaces scale-up. Scale-up is how one managed an ever-growing central processing complex. Scale-out is how one manages an ever-growing "server farm". I don't think the scale-up proponents yet appreciate how vulnerable they are to this paradigm shift. True, IT shops are naturally conservative and it will take a while for the new paradigm to take hold, but the market is a discounting mechanism and as soon as it becomes clear that a paradigm shift is coming this will begin to be reflected in valuations. My guess is that this shift will become clear to the market over the next 12-18 months even though it will likely take another 2-3 years for the old paradigm to give way to the new in the field. The key advantage of scale-out is its linearity and inherent non-disruptiveness. In an era of global 24x7 ecommerce there is literally no schedulable down time for the IT manager. IT systems must be continuously upgradable "on the fly" the same way telecom systems or any other "utility" must be.

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