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

To: Charles Tutt who wrote (45578)	5/28/2000 4:17:00 PM
From: rudedog	Read Replies (1) \| Respond to of 74651

Charles - re: n other words you're saying Wintel achieves whatever low prices it can claim by sacrificing reliability. Not quite - lower reliability is an output of the model, just as low prices and wide availability of hardware and software are an output. No one sets out to design unreliable software, but all software - including Solaris and the other Unix variants - is unreliable to some extent. It's a question of how much it costs to achieve certain levels of reliability, given the constraints of the business models of each type of development. The effort to produce a reliable and manageable platform goes up with the number of different hardware and software components which need to be supported. There are such a large number of them in the WinTel world that it is actually pretty amazing that the products work as well as they do. SUNW has the luxury of controlling the size of the matrix - that's the good part. They have to pay for that luxury with increased development cost - that's the bad part. This does not work out to "WinTel good SUNW bad" nor the converse. It does probably mean that SUNW will be able to maintain their business against the WinTel vedors almost indefinitely - their model lets them achieve certain valuable characteristics more easily. It also means that SUNW will never invade the volume space - even if they succeed in driving up costs for the WinTel OEMs, they have no chance of creating a volume business cycle. You are aware that the WinTel vendors sell about 1000 times as many units as SUNW, I assume? But the current DOJ action, if sustained, will move the line a little, and give SUNW a little fatter margin at the edge, while hurting margins for the WinTel OEMs. It is the customers who lose.