Your comment about "unbridled enthusiasm" is right on. I've been holding a large MSFT position since 1992, and my biggest concern about it is this popular attitude that there is no down side to MSFT which is total nonsense in any tech stock, and especially in an industry changing as quickly as software. If you're not prepared to lose 50% of your positiion or to leave it untouched for 3+ years, you should not be considering MSFT. So that's why I'm not buying now...
...but I'm not selling either, and the reason is NT. That's where the growth is. I believe NT is on track to become the biggest cash cow in software history. Unlike Windows 95, NT is not closely tied internally to the legacy (DOS) code base, yet it runs enough of the older programs that many don't realize this. MSFT has modernized their product line without alienating their development partners or their customers. Compare this with Apple's Rhapsody fiasco or IBM's Taligent blunder.
In four years MSFT has changed the predominant industry position on NT from "zero chance of making significant progress in back-end sales in this decade" to "fastest growing back-end system likely to be the largest player by the end of the decade". This is nothing short of astounding for a slow-to-change market like back-end equipment, one that's been running Unix for 20 years.
Remember, all server sales are brand new, not upgrades. MSFT is still learning how to sell in the enterprise, recently by RAISING prices on NT server, where many of the customers have been paying so much for so long that they are uncomfortable buying a low priced system.
I believe if you eliminated existing ownerships and got Gerstner, McNealy, Gates, Ellison, Jobs, and Barksdale in a room to re-divide the existing software properties the unanimous first pick would be NT...and MSFT's got it. |
