1.) " Your profits for Netscape are awfully optomistic. $113M is way too high for a company growing as fast as Netscape."
As was stated in the analysis, I was purposely being optimistic in order to grasp an upper bound of NSCP's value (see the DCF cash flow valuation). I feel the numbers are possible, but my opinion is that the entire NSCP valuation ordeal has been entirely too optimistic, so I took a likely best case scenario to prove a point. The perpetual growth and discouting factors created a scenario/sensitivity analysis which gives you a best, probable, and worst case scenario. What I did was eliminated the best case scenario as improbable (long rates are not going to go down very far in the near future), and made the probable scenario the best case scenario. While that is not necesarilly an academic method, I believe it comes close to capturing the value of the company.
2.) "You are extremely optimistic on Microsoft meeting dates."
As was stated in the article, MSFT has been much better at meeting dates since challenged by NSCP. They have much more of an incentive to meet dates now, its called competition. It is my belief, and most likely B. Gates as well, that if NSCP is allowed to get too big, they can wreck havoc with MSFT's franchise.
" and many of the items you are mentioning are slipping. In particular, the 64-bit version of NT has probably already slipped out of '97"
This article was originally written some time ago, you may or may not be correct, I have not heard of it though.
3.) "I wonder what the real split on sales for Netscape is between browser and server software. I had heard that their server sales were growing extremely rapidly, especially for office intranets."
Who knows. It appears Netscape is concetrating on the server side (and publicly downplaying the importance of the client) because of thier inherent weakness on the client side as compared to MSFT (bundling with the OS). The only way to find out is to see the actual numbers.
4.) " Microsoft is behind on O-O DB support. It is unclear when SQL Server will have any such support. Informix/Illustra is already shipping an ORDBMS with a Web DataBlade, that was the basis for the 24 Hours in Cyberspace demo (and several more recent ones), and is the basis of several very interesting web sites. Oracle just announced their "web cartridge" which claims to have similar capabilities. ODI and other OODBMS are also being considered for some such web sites. In contrast, Microsoft seems to be quite behind in this area"
You must be cautious not to measure share price performance by product technical capability. MSFT has won many, and it is well documented, races for market share with inferior (at the time) technology. Imagine the synergy created by bundling SQL with NT server and IIS. for a high end package. The marketing capabilites and progressive penetration of NT should not be underestimated. And since this is new territory for MSFT, and not thier staple item, almost all penetration will be reflected as new found money. The 200gb market, if I am not mistaken, covers quite a bit of middle ground, and NT "MAY" not be accepted as a truly high-end scalable enterprise solution until next year anyway (after it has proven itself).
"However, I do believe that there are plenty of holes in the "slide show" that they are giving on future directions, and that these need to be examined closely."
You are absolutely right, and that holds true for both companies. I was thinking the exact same thing as I was typing my little article. I have uyncovered quite a few in NSCP's slide show throughout the article. Unfortunately, there is no incentive for me to dig much deeper at this time (I am not getting paid for this). |
