Silicon Investor (SI) -- The First Internet Community

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 : Red Hat Software Inc. (Nasdq-RHAT) -- Ignore unavailable to you. Want to Upgrade?

To: Mitch Blevins who wrote (1118)	9/9/1999 2:04:00 PM
From: Eric Wells	Read Replies (1) \| Respond to of 1794

>>How much (if any) do you think these considerations >>are weighed in the decision-making process of CIOs? Mitch - thanks for your post. I would say that the logic of your argument is very sound. However, at this point in time, it may be difficult to apply it to Microsoft, the reason being: the CIO (at least, in my view) is under the realization that his/her company will have to go through server upgrades probably every 3 years (maybe more, maybe less depending on the company). I believe most CIOs are under the opinion that Microsoft is on very strong financial footing, and will not be going out of business any time soon (Microsoft continues to have strong sales and net income, and I believe Microsoft currently has about $20 billion in cash). So the CIO would view the risk of Microsoft going out of business as being very low. But the CIO will also be concerned about whether Microsoft can continue to create new and better versions of NT, and continue to offer support and service for NT. Microsoft has a pretty strong track record in this area - in the past Microsoft has forged very strong relationships with corporate customers by regularly improving their business software products, implementing new technologies and making them easier to use (some who are not impressed with Microsoft's products may dispute this notion). Also keep in mind that Microsoft keeps its corporate customers abreast of where it is going with NT. NT product managers regularly visit Fortune 500 CIOs to inform them of Microsoft's product development plans - Microsoft has CEO/CIO briefings that occur on a quarterly and annual basis during which Microsoft executives (including Gates) inform Fortune 500 executives of the current state of Microsoft's development activities as well as Microsoft's future plans. Microsoft does not develop NT in isolation - there is a lot of input from corporate customers, and there are a lot of corporate customers that are involved in alpha and beta testing early on. I'm not saying that there is no risk in this area - there certainly is risk - because if Microsoft fails just once, by bringing out a "poor" version of NT, or an extremely delayed version of NT, Microsoft could destroy some of the trust that it has built with the executives at it's Fortune 500 customers. In summary, I would say that CIOs view there being low risk in Microsoft's ability to generate new and improved versions of NT and to continue to offer support for NT - at least for the next 3 years. So, in short, I don't think that the multi-vendor choice issue is as important with regard to Microsoft and NT as it might be in other situations. However, the climate can change at any time. If Microsoft delivers a poor product in the next version of NT, then I would say CIOs will be giving other operating systems, such as Linux, a closer look. Thanks, -Eric Wells