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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: codawg who wrote (29076)	9/2/1999 9:19:00 PM
From: Just_Observing	Read Replies (1) \| Respond to of 74651

Here is another viewpoint on Star Office and its potential effect on MSFT. This article says that MSFT gets 3 billion a year from Office sales. The numbers I have been coming across have been as high as 40% of total revenues (or about 8 billion of the 20+ billion revenues expected in the next 12 months). I really don't know what fraction of MSFT's revenues are from the Office product. But it is clearly a big cash cow. washingtonpost.com Sun has not revealed the amount that they paid for Star Office. Is it such a large amount that they are afraid that it will be badly received? In any case, the Office application market is getting to be interesting battleground. I wonder how MSFT is going to blunt Sun's initiatives.

To: codawg who wrote (29076)	9/2/1999 9:51:00 PM
From: t2	Read Replies (5) \| Respond to of 74651

codawg, Excellent analysis. You forgot to mention Corel WordPerfect. Companies just stopped buying it. Those that had----ended up spending more money in retraining employess in Office and the extra cost to buy Office after paying for Wordperfect. I would say that MSFT has even a stronger grip on Office than they do on Windows. For the average user, not much time is really spent on the operating system anyways. It will take a lot more than a strong competitive product to lure people away from Office and take "gambles" on alternatives. Imagine a company advertising for new employees with Star Office experience.... IMHO, a product has to be truly revolutionary before Office is dethroned. I just hope MSFT does not take this "threat" too seriously. If SUNW really wants to make it "work", they should look for the Microsoft marketing team of the early 1990s and hire them--then they have a small chance. However, I don't believe Bill Gates would be interested.<g>

To: codawg who wrote (29076)	9/3/1999 1:19:00 AM
From: Reginald Middleton	Read Replies (2) \| Respond to of 74651

point 1) As a spreadsheet specialist, most CIO's and CFO's rarely use more than 40% of the functionality in Excel/Word 95, not to mention 97 and 2000. The bloat in bloat where is an extension in MSFT's business model, not an answer to customer requests. Let's assume that I am wrong, a thin client app that would load the bloat on the fly through a high speed network is ideal (my product does that BTW:-), Office 2000 does it but it costs $249 to upgrade, with a 40% discount for bulk purachases times 87,000 (E&Y's current headcount) that is about 13 million dollars every two years(MSFT's upgrade cycle). Add in the IT help desks time (roughly 150 professionals at $80,000 per year, divide by twelve for one months work to complete the global upgrade) at about $6,200 per month * 150 = $930,000, and then add in the hardware (let's say a half a terabyte to be safe @ $0.20 per megabyte = $100,000, plus the time of the adminstrators for the upkeep of the network (about 100 administrators at about $75,000 per year over two years, adjusted for that part of the job related to server space storage (let's about 35%) = (15075,000).35= $3,937,500. Now let's add the true cost of Office over two years (without training for the upgrade which will be needed for Office 2000 and/or NuoMedia which is my competing application). $13,000,000 + $930,000 + $100,000 + $3,937,500 = $17,967,500. This is the price every two year mind you, not factoring in nominal, real, wage or software price inlation. Now let's compare the NuoMedia price every two years - $0. Server storage space = a few hundred thousand dollars. This is a pretty big difference. Everybody might not go for it, but it will be unrealistic to assume no big corporation will not bite, especially as a trial since the cost is nill. For more on NuoMedia, see cnnfn.com and nuomedia.com (why hype Suns's stuff when I can hype my own:-) point 3) NuoMedia is 100% HTML 4 and XML compliant, therefore easily read by any fairly recent Office application and can read Microsoft Office apps as well (MSFT now enables averybody to choose XML/HTML as the default file format - this is the big secret). points 4 & 5) The ability to store both files and apps on the web is the newest and coolest technology. Microsoft is currently the laggard in this arena. point 6) Even Office is not as ubiquitous as the World Wide Web. Excuse the typos, its late and I'm tired.