How high will Microsoft fly? Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : How high will Microsoft fly?

MSFT 475.60

+0.7%

1:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Vijay Mehta who wrote (15102)	1/25/1999 3:33:00 PM
From: DownSouth	Read Replies (1) of 74651

I would say that product development cost is usually about 20% to 30% of the total costs. Sure, manufacturing costs are small, but a good percentage is customer support. A good 30% of shrink-wrap product's costs are in post-sales support. No argument from me. You have filled in the shortcomings of my post, indeed. And you go on to say: Getting $5 profit from each one every quarter would meet their current bottom line. But the question is how they can generate that. Is there a powerful need for an upgrade, once you have the basics covered? It seems that MSFT has been successful time after time in showing a need for an upgrade. Whether the upgrade is viewed by MSFT-resistent folks or is viewed as unneeded by more objective users, they continue to succeed. Do you recall the bad press around WIN98? It still is a big winner. OFFICE 2K will be, also, I believe. And NT continues to grow with new customers, somewhat at the expense of the UNIX world. My point was, and remains, that the software industry (of which I am a member also) has product cost and margin considerations that are very different from manufacturing-based products and making arguments that MSFT is monopolistic because it gains high margins is not valid.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next