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

To: John F. Dowd who wrote (29190)	9/5/1999 11:24:00 PM
From: Mitch Blevins	Respond to of 74651

Hi John. I stand perplexed alongside you as to what the motivations for Sun's actions are. I would never claim to be able to fathom the inner workings of the twisted and dark recesses of Scott McNealy's mind. ;-) But, like all armchair CEO's, I'm willing to take a stab at it... MS Office poses an indirect threat to Sun, in both their hardware and software business. As the protocols become more complex, we start to see that the clients (Office) work much better when using (say..) an Exchange Server rather than a simple SendMail server on a Sun Sparc. This trend will continue as long as MSFT controls the majority of the productivity applications. Without breaking MSFTs hold on Office software, Sun will become marginalized in the future. I think McNealy knows this, even if he might not want to admit it. Of course, breaking the MSFT's grip on the Office market has been tried many times, and all attempts have failed. I think that it is obvious that Sun could not compete with MSOffice in the traditional manner of developing a competing product and selling it for the same or slightly lower price. The only chance Sun has of breaking that grip is to sacrifice software revenues for this new purchase in hopes of commoditizing the application productivity market. I think the $25M they paid for StarOffice is cheap if this goal is accomplished. The strategic advantages far outweigh any short-term revenue gains that might have been had by selling the software. Whether this strategy will work for Sun is something I cannot even guess at. Sun seems to be in dire straights these days with both Linux and NT pushing up from the low-end of the market. Only time can tell if their strategies will be fruitful. It would be nice to think that the CEO of a company as big as Sun would be above making such decisions out of vindictiveness, but then again... it would be nice to think that the President of the United States is above playing hide-the-weiner with his aides. ;-) Whatever happens, it will be interesting... -Mitch

To: John F. Dowd who wrote (29190)	9/6/1999 9:15:00 PM
From: Stormweaver	Respond to of 74651

Sun's Star investment bet was on the selling of more back end iron when StarPortal is released. If Star took off, the other big win for them is greater desktop control leading to dependance on their goal of a thin client model -the ideal model for selling big iron. I question the freebie as well. Firstly the DOJ won't look at that favourably and if this thing managed to sell it would probably generate $1B/year in revenue. Also being "free" will make the corporate world wonder if Sun is committed to providing maintenance/support; especially for the Windows release! Paying for something means you can complain about it. Therefore being free may look good in the short term but I think the tried and true solution of MS office will keep it's market share. Cheers James