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

To: Daniel Schuh who wrote (45585)	5/28/2000 4:43:00 PM
From: rudedog	Respond to of 74651

Dan - I didn't know that Bill said so, if so there is at least one area where we agree (perhaps the only one!). But the markets currently served by SUNW and those served by the WinTel vendors don't have much intersection, despite the PR. SUNW's high end server business is not vulnerable to WinTel at the moment, and will not become vulnerable for years, and then only if SUNW sits still, which they will not. SUNW's competitors in that space are IBM, HP to a much lesser extent, and CPQ Alpha if they ever get their act together. At the low end of SUNW's business are small servers, or workstations used as servers, and high performance desktops. In those areas, some customers are shifting to WinTel - this has been the bulk of the so-called "enterprise penetration" of NT. SUNW still derives a lot of revenue from that segment but it is increasingly low-margin business as SUNW drives cost down to maintain a competitive offering. Increased costs for the WinTel vendors would reduce that pressure and allow SUNW to maintain or even increase prices, while still keeping or even increasing current sales. This is pretty simple stuff... the dynamics of that particular battle have been well analyzed and discussed for years. Gartner has some excellent work on the topic, and most other analysts have at least addressed the issues. There is not a lot of debate about the forces at play or the effects on the market. I would imagine even some of the DOJ people must be familiar with at least the basics.