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

To: Harvey Allen who wrote (49427)	9/16/2000 10:31:23 AM
From: alydar	Read Replies (1) \| Respond to of 74651

Yes, if a bus can get me to my destination as quickly with less stress, then sign me up. Rudedog, what happens when it is time to do maintnance on the transporation you use. Is it cheaper to tune up one bus of 50 cars? Which is quicker? Not all tuneups are perfect, so how many times do you have to go back to get it right? Are the people who drive cars professionally trained in driving and maintaining such a machine? Does it really make sense that everytime your car needs a tuneup you go out and purchase a new car because of updated features? Thats pretty much the way the PC industry is today. I want an update, it does not pay to go for a tuneup, it makes more sense to go for the whole shabang, a new PC. Server centric computing is going to lower the cost of ownership for computing. As was mentioned previously, broadband will enable you to keep your internet device (i.e., hardware) for many, many years. The speed and updates will be provided by the service provider. That is where the economies of scale come in. I can have the latest, fastest, best technology for a monthly fee. One has to look at AOL to see the logic in this. Thanks, Bob.

To: Harvey Allen who wrote (49427)	9/16/2000 11:46:26 AM
From: rudedog	Read Replies (2) \| Respond to of 74651

Harvey - I regard comments like yours about MSFT being able to "starve thin clients in the crib" as the "shooters on the grassy knoll" theory of how the industry developed. MSFT did nothing to slow the development and deployment of thin client technology - not on their own stacks, and not in the competing space. They basically ignored it until Citrix showed the concept was viable, and then brought out a "just good enough" product. The Citrix products are pretty good, and I have been using them for years. I have the luxury of being able to indulge myself with whatever hardware and software catches my fancy. In addition, the client base I work with (mostly financial houses) was an early adopter of thin client technology, for a number of reasons. Based on the success of those installations, CPQ and others embarked on a fairly aggressive program to expand those markets out to areas traditionally held by PCs. This was a natural for CPQ - they want to shift their revenue mix into servers anyway, they have the service and engineering skills to do a first rate job of meeting the customers' needs, and they already had the majority of that business. The results were less than earth-shaking. Even in accounts that I was very close to, users who had any general-purpose computing requirements simply did not have any interest in moving to a centralized model. And that should come as no surprise - the history of the industry over the previous 20 years (including the time when MSFT was only a minor force and folks like IBM had the "monopoly power") was to give increasing power to end users and de-centralize. The economic arguments were much weaker at that point than they are today - network capability was weak and hard to administer and maintain, PC hardware was expensive (roughly 10 times the cost of the technology it was replacing) and functionality was limited. The shift was based on a very simple proposition - end users wanted control over their experience, data, and functionality. The PC gave that to them in a way which nothing else had done. I don't think these users were somehow "brainwashed" by MSFT or that their choices were restricted - I think they really did not like giving up any of the local power they had acquired. The notion that the internet, high speed connectivity beyond the LAN, the shift of the development paradigm from the platform to the net, and the blurring of local data and services in "the cloud" spells the end of MSFT's old business model over time is certainly undisputable. I believe MSFT saw that coming a ways back, and that is what the "dot-net" initiative is all about. MSFT's business practices and so-called "monopoly power" resulted in technology going a different way than it would have if say IBM had maintained its hegemony - but the same is true of any number of technology shifts over the years. MSFT was good at riding the wave, but much less successful at changing where the wave would go. Netscape attempted to take one good idea (which they didn't even invent) and take that to market dominance based on marketing, not engineering. MSFT had a hand in their demise, but their lack of foresight on where the market would go, and the inevitable commoditization of internet infrastructure components, had a lot more to do with it. They were an early object lesson in what happens to the valuations of companies built on a faulty business case, a scenario we have seen played out many times since in areas where MSFT has no presence or impact. MSFT was just a convenient bogeyman to blame. I first bought MSFT in 1991, at a time when no one considered them a monopoly and their value surely did not reflect that. The increase in the value of that investment slowed at about the time people started to see MSFT in a monopoly position. So My sense is that MSFT's prospects will actually improve if their earnings are re-calculated as a non-monopoly, if history is any guide. Assuming they can execute on their new vision.