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Technology Stocks : All About Sun Microsystems
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To: chic_hearne who wrote (33135)6/27/2000 11:19:00 AM
From: Bill Fischofer  Read Replies (3) of 64865
 
Re: Architectures

The problem is that because applications are no longer tied to specific processor architectures there is no inherent processor affinity to assist in the sale. Everyone understands that chip design is a constant game of leapfrog. The real issue is not how specific chips rank at any given time but rather who can boost volumes and bring costs down faster and more sustainably. This is the essence of a commodity market. In a world where applications are insensitive to underlying architecture it is very difficult to justify premium pricing (and margins) on the processor. Branding certainly plays a role, but all the players are working with strong brands. Technical issues like EPIC will be debated but again they exist below the level of application visibility and as a result will have a muted role in customer purchase decisions. Ultimately one must ask why a customer whose business depends on XML-based or Java-based applications would care whether those applications are running on a Power4, IA64, Alpha, or MAJC chip? Over time, the only thing the customer will really be able to measure is cost. Given that processors will be interchangeable without application impact or migration concerns economies of scale will tend to translate directly into market share.
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