Eric,
>>2. Cede the desktop software battle to others, low margin anyway.
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I don't see a reason for SUNW to cede the volume desktop market
to anyone. Margins are small, but volume is potentially big.
The NC's cost-of-ownership figures will convince quite a few IS
managers to seriously consider it as a PC alternative.
Believe it or not, there are lots and lots of PC's in place right
now that don't even qualify as good boat anchors. They are very
expensive compared to way that they are used: customer service
terminals, point-of-sale terminals, order-entry terminals,
inventory & billing applications etc...
These uses do not require a disk drive. Fast networks are a
necessity, but businesses are upgrading to 100-base T ethernet
anyway. Thin client technology is highly applicable to the
volume desktop market, and I believe it will succeed along with
the eventual replacement of the existing terminal market, which
numbers in the area of 30 million units.
IBM has already had more orders for their initial run of NCs
than they could fill. It has been reported by more than one
marketing research firm that the NC's cost-of-ownership is about
50% lower than that of the PC.
SUNW is certainly a hardware company. As a manufacturer and vendor
of computing equipment, it is also in the best position for
selling & supporting Operating Systems, licensing peripheral
interface specs, and setting industry standards for communications
protocols, language compilers, and application development, all
of which it is doing.
Great companies, like SUNW, succeed with great ideas. If the ideas
are generally accepted by the industry there are associated intangible
benefits that are not directly reflected in the yearly revenue charts.
Things like prestige, trust, competence, and commitment provide good,
positive exposure for SUNW and go a long way toward convincing
prospective customers to buy hardware and operating systems.
Conversely, MSFT is in a poor position to support NT for anything
beyond a workgroup server. They don't have the money, time, or
experience to compete in the corporate market. The workgroup
computing segment is currently owned by Novell, MSFT's main
competition. Since MSFT doesn't normally cooperate with industry
standards (what? NT doesn't support NFS??), and because they have a
tendency to replicate rather than innovate, they will not be
contributing to industry standards anytime soon. They also face a
shrinking market for "Window's" customers. Their one saving
grace will be Java. With it, they can do what the do best: write
Java-based applications programs for the office and home market
while paying SUNW for the right to do it.
Don't forget MSFT buit its company on licensing revenues from
MS-DOS. Can you be certain that SUNW won't see a windfall from
licensing revenues from Java?
cheers,
cherylw |
