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To: Randy Ellingson who wrote (87690)	12/16/1999 11:47:00 AM
From: Eric Wells	Read Replies (1) \| Respond to of 164684

MSFT will be worth $1T relatively soon at this pace of technological and economical growth, unless they are divided Randy - while I own some MSFT stock, and while I like the company very much (after all I worked for them for a few years), I view Microsoft as facing many risks. There is definitely going to be a lot of fanfare surrounding the release of Win 2000 - and there will be a substantial push by Microsoft to get every home and business computer upgraded to the new operating system. But you have to realize the enormous costs incurred by a business in upgrading to a new operating system (the price of the software makes up only a fraction of the cost - the real cost comes in the labor involved in installation, support, training, etc.). Businesses must see significant advantage to Win 2000 in order to be willing to incur these costs. Certainly there will be many companies that will see such advantage. I'm sure, however, that many analysts will be comparing the upgrade rate of Win 2000 to that of Win 95, 4 years ago - and if the Win 2000 upgrade numbers don't match, or greatly exceed those of Win 95, this might form the impression that Microsoft's momentum is slowing down. An area of greater concern that I see for Microsoft is in the Office product. Currently Office contributes about 50% of Microsoft's revenues and profits - 50%! Should the momentum on Office sales slow, it might create the impression that Microsoft is slowing. While upgrade rates and sales have increased with every new release of Office over the past six years, one could argue that the new releases are delivering fewer new features. After all, is there much a of a difference between Excel 97 and Excel 2000? In my view, no. So why pay to upgrade? Or better yet, why should a corporate customer pay several million dollars to upgrade thousands of users. While I think Microsoft is a great company, and that MSFT is a great stock, I would not ignore the very real risks that the company faces in maintaining its current revenue and profit growth. Thanks, -Eric