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.

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

To: 100cfm who wrote (31027)	9/3/2000 11:27:35 AM
From: hueyone	Respond to of 54805

re: Therefore they will most likely have to continue to spend large sums of money to a. stay ahead of the "In House" technical advancements and b. must do it cheaper then the In House staff in order to convince a company to go with an outside product, which will I believe keep pressure on net margins. I agree that there currently is pressure is on WIND's net margins as it builds market share by taking away development from in house OS teams. But companies moving to WIND because of the "complexity" and "time to market" pressures John Huber so eloquently spoke about, are going to have to make the decision whether or not to keep up the development climate for in house OS as they move towards WIND products. Maintaining a climate for in house OS development, as well as using WIND products, will turn out to be prohibitively expensive for many companies. In house OS development will be a natural place to start cutting costs once the company starts relying on WIND products. And once many of these companies "are hooked on WIND", Wind will be able to gradually start raising prices, as well move the customers up to higher margin, more complex WIND products. In fact, WIND has already told us to expect a steady increase in net margins every quarter over the coming year. (Snowshoe, correct me if I am wrong, but aren't net margins supposed to increase rather dramatically to 20% over the next year?) Another thing WIND is doing to accelerate their market penetration, and the market movement towards the WIND standard, is giving away free tools for OS development. The acquisition of the EST OS development tool company by WIND earlier this year has turned out to be an unbelievably important strategic acquisition for WIND, in that it enables WIND to offer the key starter product in their end to end solution. Get in house OS developers hooked on EST OS development tools, and purchases of higher margin WIND products will not be far behind. Adopting the WIND standard is the path of least resistance and the roadmap is set. In my view, what we have going on here is a classic case of a gorilla candidate company setting market share during the tornado that the GG manual references. Best, Huey