Hi Charles,
Great response but let's get a clear picture of the situation right now:
1. The reason why you think they are dominant is because their specialty is the PC's market which uses the media more.
Rebuttal: Pc's and workstations are two distinctly different markets.
Pc's are geared towards us while workstations are for business oriented people. Sun dominates the current workstation market and owns 41.7% of the revenue share worldwide. This year alone they have increased market share 5% this includes the highly touted Windows NT.
2. You stated that Microsoft will steal Sun's paradigm and market it better.
Rebuttal: Before Microsoft can steal something they must create the product. Mr. McNeely hates Mr. Gates, rest assured that Gates and company will never be able to leapfrog the innovator. Microsoft has always been able to steal ideas under the pretense of working with companies they intend to have an alliance with. However they are dealing with the big boys, now. Therefore, the company getting it's feet wet is Microsoft, they must actually create a product from scratch (software for the P7).
3. Microsoft and cohorts are entering the backdoor.
Rebuttal: Sun is well aware of what Microsoft is doing. That is why they have lanched a two stage attack. Phase one being the lowering of UltraSparc prices. This only squeezes the margins for Compaq, Dell and cohorts. Phase two is the NC(JavaStation), which attacks Compaq's and Dell's primary market the PC.
4. Software will become less high margin.
Rebuttal: NONE, I agree. What does this do for Microsoft? It's bad very very bad. I've stated before that the current two year time frame is the most vunarable for Microsoft.
Conclusion:
Do you know that over the past two years, MSFT has reorganized three times? Does that sound like a company in control and knows where they are headed? Currently Microsoft is stuck in nuetral. They must wait two years until the product that will fuel their growth becomes a REALITY. So, in the mean time all they can promote is their Windows NT, which will lower in price to compete against Sun and other UNIX vendors. Of course, a positive spin will be put by the media and MSFT will rise. But, I always remain patient "the bigger they are, the harder they fall". What do you think, Microsoft will do over the next two years?
Ellison |
