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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (7013)	9/25/1999 9:34:00 AM
From: James Sinclair	Read Replies (3) \| Respond to of 54805

I would love to find a new Gorilla in the Mist, Jim, but I think Linux and Java will always be chimps. Linux and Java will never even be chimps from a gorilla game perspective. The Linux source code is in public distribution, so if it really does take off you can bet there will be more companies besides Red Hat trying to make money off it. Java is just a programming language and it certainly doesn't seem to be helping Sun become a Gorilla. Actually what I'm looking at is a scenario of incremental steps that could break Microsoft's gorilla status. Think about this for a minute: 1. Large company seeks to lower their total ownership costs for their IT assets. They set up a Citrix server farm and manage their software from there. Everyone's still running Windows on the clients. 2. Company decides that since Citrix supports Linux, they can replace some or all of their Windows machines outside the server farm with Linux boxes. People using these machines see very little difference because within the ICA client they're still running Windows. Microsoft still making money on the servers and the Office licenses required to support the Linux clients. Company saves money on the client OS licenses. 3. We know not that Citrix is at least talking to, if not working with Sun. All that's missing is for someone to develop a really good replacement for Office that runs on the Sun platform and the company could change the servers in the Citrix server farm. What would drive them to want to do that? Maybe a more reasonable licensing policy that doesn't require the company to pay for an Office license for each client supported by the server farm. Maybe reliability or security concerns, since these are areas that are still not exactly Windows' strengths. As you may have figured out, the interesting player in this scenario is Citrix. I don't know if that would make them the new gorilla, but it will be interesting to see where the relationship with Sun is heading. Remember that one of the things that makes a gorilla is the cost of converting over to anything else. This scenario breaks that cost down into smaller, manageable steps. Step 1 is already taking place in a lot of companies. Step 2 is not unreasonable at all in the near future. Step 3, I don't have a clue.

To: LindyBill who wrote (7013)	9/25/1999 10:13:00 AM
From: Mike Buckley	Read Replies (2) \| Respond to of 54805

Lindy, I have never liked the fact that Rambus is a "one trick pony", with its future controlled by Intel. I used to think that too but I don't any more. It is mostly a one-trick pony but I disagree that its future is controlled by Intel. It's only recently that I've come to change my opinion about Rambus's fundamentals in gorilla game terms thanks to the persistently stubborn people in this thread who never gave up on trying to get me to see the light. Intel is a hugely significant link in the company's value chain. I've now come to realize how dependent Intel is on Rambus. Intel still needs revenue from faster and faster CPUs. However, it's important that those faster CPUs offer benefits that are comensurate with the features. If the bandwidth becomes the bottleneck on the motherboard, the product adopters don't benefit from the features and the product won't be adopted as much. That is the complex problem that Rambus's product solves and it's an immensely important one in my opinion. Gemstar looks terrific, except for the lawsuits! Lindy, would you mind clarifying exactly how you think adoption of Gemstar's product will be affected if Gemstar loses all of its lawsuits? Beware, friend, that it's a loaded question. There's no doubt in my mind that Gemstar looks terrific without the lawsuits. But I'm not sure that people really understand that losing the lawsuits has much less downside risk to Gemstar than winning them has in the upside potential. In my opinion, that can't be said for Gemstar's opponents. That's exactly why both Gemstar and StarSight (before Gemstar bought the company) have not once lost in court. That's why Gemstar's opponent tried to buy Gemstar. For me, the real issue about the lawsuits is the safety issue in context of gorilladom. The settlement of the lawsuits, regardless of what some reasonable settlement terms are, will open up the flood gates to product adoption. Settlement will likely be the catalyst that allows the tornado for interactive program guides to begin. My long-winded point is that it's not winning or losing the legal issues that presents the risk. It's that delay of getting the product out of the bowling alley and into the tornado that presents the risk. For the record, I'm going to give a lot of thought this weekend to adding to my Gemstar position. At this point, a decision to increase my holdings will be a gamble, not a gorilla-game tactic, that places a bet that there will be some significant news about one or more of the litigants that might propel the product out of this range of higher risk into a range of lower risk. --Mike Buckley

To: LindyBill who wrote (7013)	9/25/1999 11:05:00 AM
From: NY Stew	Respond to of 54805

LindyBill, Gemstar looks terrific, except for the lawsuits! The courts are a risky business in this county, and the company is in real trouble if they lose a major suit. After reading your comments I salivated to reply but Mike pretty much summed it up with his response. Let me just add a few comments. Gemstar has agreements and relationships with many hundreds of CE OEMs, cable companies, broadcasters and publishers worldwide. The current legal issues can be characterized as Gemstar vs US Cable. This feud represents less than 10% of the global market. Gemstar is little known but it already has the de facto video recording standard in 40 countries. This is not their first time around the block, so to speak. You may want to look at this Gemstar European website and check the cross-industry relationships in the various countries. Gemstar already has an existing powerful franchise onto which it is building its second standard. Microsoft has paid them well with an attractive agreement to have access to this global network. Click "Publications" and "Manufacturer". gemstar.co.uk Regards Stew