Article entitled "Spotting potential Internet Losers" in II Online, has CTXS listed among 6 high-risk Internet stocks (AMZN among them) per George Putnam this week, for the convertible debt issue. Common stockholders are exposed to significant dilution at best, or real business going-concern risk if conversion doesn't happen and sales growth doesn't meet business plan. Company has truly bet the farm that they can execute on that plan according to the author. Of course, that's not really saying anything different than all of us already know about this company/investment. CTXS was last on the list for debt/sales ratio, though small comfort...
iionline.com
How concerned are we or should we be as to the (so far hidden) identity of the holder of this debt? From everything gleaned to date, this seems a doom-or-boom event. Is MSFT the only real contender in the context of these times? If MSFT, then let's pay even closer attention to what's up in Redmond. I find this recent reorganization effort fascinating, and if CTXS factors in here in any substantial way, I'm more bullish than ever.
This week's Fortune, in addition to being an extra pound heavier for the annual Fortune 500 data, includes a great inside story on MSFT reinventing itself with Ballmer as Pres in action. I read with great interest the guiding principles of this plan, and Allchin's remarks about the "United States of Windows." They're flat out declaring that Windows 2000 is going to come in functional varieties, focused on specific niche application areas, so long as they all can run Office app's (performance criteria notwithstanding). I'm interested in others' opinions here - are we looking at a logical MetaFrame version of the OS, for the mobile, appliance, video markets?
Draw your own inferences from the full story, but I am encouraged by both opening and closing observations
1) Ballmer and Gates recognize it's time to change MSFT's attitude (about partners?) and temper their PC zealotry;
2) "Ballmer and Gates are moving fast to get Microsoft fixed before Wall Street notices that its monopoly is ending..."
So MSFT has to move fast, and in a decidely less isolated fashion? There's a presage that I can live with.
pathfinder.com
>>
Gates and Ballmer make no bones about the need for Microsoft to grow up and temper its PC zealotry. They've even changed its official mission. For as long as anyone at Microsoft can remember, the company's grail has been: "A computer on every desk and in every home." Now the objective is much broader. In a statement accompanying the reorganization announcement, Gates declared: "We see a world where people can use any computing device to do whatever they want to do anytime, anywhere. The PC will continue to have a central role ... but it will be joined by an incredibly rich variety of digital devices accessing the power of the Internet."
The changes afoot in one of its five new units, the business and enterprise division, suggest how the process could unfold. The group is responsible for most of Microsoft's Windows systems, including 2000. Its boss, senior vice president James Allchin, is breaking it into subgroups, each focused on one type of customer. One subgroup will target mobile knowledge workers who use laptops. Another will target IT professionals running corporate servers. Each subgroup must adhere to a few ground rules. (Example: All versions of Windows must be able to run basic applications like Excel, Microsoft's spreadsheet.) Beyond that, the subgroups are free to develop and market versions of Windows that differ in functionality, look, and feel. Allchin calls his approach "the United States of Windows." He says, "We'll do a better job if we talk to customers more."
Making such changes throughout the company will be tough. Even if Ballmer succeeds, Microsoft is unlikely ever to replicate the lock it has on the desktop. No company is likely to. In the Internet world, the rules of the game have changed to favor a diversity of products, services, and even standards. Thus 3Com, with its Palm machines, may dominate the hand-held organizer niche without ever competing in, say, digital music players or TVs. Sony's PlayStation can be a top game machine without Sony's being competitive in PCs. Even the enterprise software market will become more diverse, with openings for many systems from many companies running many applications. In fact the primacy of the general-purpose computer itself is waning: The world is beginning to see specialized computers for specific tasks on the network, like database machines recently announced by Oracle.
You could say that, anticipating all this, Ballmer and Gates are moving fast to get Microsoft fixed before Wall Street notices that its monopoly is ending. But maybe that's underestimating the stock market as an information machine. Maybe in driving the stock to an all-time high, the market is betting on the ability of Microsoft to adapt. <<
Fun times ahead, that's for sure.
dd
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