NT will not take much UNIX market share. I use NT, and it is fine as a toy workstation, or even a toy server. NT is not ready to compete with offerings from the likes of SUN Microsystems, Silicon Graphics or HP, however.
NT is single-user, has a hardware-bound-gui and makes poor use of it's hardware (is not efficient). UNIX is a multi-user, Distributed GUI (X), highly scalable, open, mission-critical OS. Anyone who believes differently lives in a fantasy world.
Lets talk about legacy for a second:
SHOCK #1) Microsoft software (all of it) is about to become legacy software. The generation of software now being developed is Java based (distributed componentized software). This software will run on Java NCs or PCs and will revolutionize the industry in thousands of ways. Because all current Microsoft software is a generation behind this model, all current Microsoft software will be "legacy" in less than one year.
SHOCK #2) NT is not ousting UNIX. Not at all. IS/IT managers consider the proposition that NT could oust UNIX as a joke of the first order. NT 4.0 is not even selling well. Fry's Electronics pulled it from their front shelf display and put it in back because it wasn't moving. They replaced it with Windows 3.1 for dummys (a better seller? You figure it out.)
SHOCK #3) The PC is going away. The NC is definitely going to devour PC sales in fortune 1000 companies (the biggest PC market). Cost of ownership is enough in itself, but there are many other reasons why this wave is starting. It is as unstoppable as the movement from DOS software to Windows software. The technical and financial advantages to widespread enterprise adoption of Java based NCs leaves very little room for indecision.
SHOCK #4) Even in the legacy (chuckle..) software market, Microsoft is losing ground. Corel's office suite has outsold Microsoft Office in the retail sector for the last two quarters. Sales for this quarter indicate that the trend is not changing. This type of grass-roots saturation of Corel's office suite will eventually find it's way into the enterprise (people want to use the same product at work as they do at home). Also note that Corel has a Java version of their office suite that is quite nice - and will be ready to displace the "legacy" contender from MSFT in the enterprise at about the same time that JavaStations are finding their way onto everyone's desk.
SHOCK #5) In the PC marketplace, W95 and WNT are about to experience an earthquake. The name of that earthquake? BE. Yes, BE (http://www.be.com). This is the next generation Mac O/S (Apple is in negotiations with these guys now). BE makes NT look like yesterdays garbage. BE will find it's market through the loyal customers of Apple and will spread by virtue of it's technical superiority. Through emulators, you can expect BE to be compatible with Mac system 7.5 and Windows95.
There are other shocks for the unweary. The tech industry is full of shocks. If you would have asked the average industry guru in the early eighties if he thought that IBM would be displaced by the PC, you would have been laughed at. Do not take what is currently happening too lightly.
Why is Microsoft frantic right now? Why are they reorganizing every other day? Why are they firing top management? Why? Why? Why?
They are scared. NT is not taking off like they planned. Netscape has not fallen to their give-away strategy. SUN has launched the greatest offensive Microsoft has ever encountered with Java and the JavaStation NC. All the savvy Silicon Valley companies smell Bill's blood and are circling like wolves.
One quarter with earnings that miss projections, and MSFT's P/E will normalize to 20. They are too big to have a P/E of 40+ already. This over-valuation continues only because Microsoft's profits have consistently grown. Any indication of that trend slowing or stopping will spell doom for Microsoft's stock price. Please examine earnings numbers at techstocks.com. It looks as though growth is slowing now. I expect that MSFT earnings will stabilize within two quarters and will miss expectations before summer, causing a major correction of it's P/E. With a P/E of 20, MSFT stock would sell for right about $70/share (pre-split) or $35/share (post-split).
We are seeing the last great rise of Microsoft. Soon they will plateau, ease downward and finally sink into powerful shadows and obsoletion like IBM. It is simply the way of things.
SUN Microsystems, however, is about to start biting into Microsoft's market with JavaStations. SUN has alot of room to grow in all of it's markets.
If you own MSFT, sell while it's high and get the hell out. Many people are going to loose fortunes when the market corrects MSFT's P/E.
-Dan |
