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

To: Charles Tutt who wrote (52596)	11/3/2000 8:22:00 AM
From: rudedog	Respond to of 74651

Charles - TPC-C is just one way of determining coat versus scale, and is not nearly as relevant as it was 2 or 3 years ago. But independent of those results, the factors affecting the development of big boxes versus the volume market have been pretty well studied and analyzed. Volume affects costs pretty dramatically, and the number of jobs that justify the exponential increase in price as you move out of the volume component space in things like memory and bus subsystems, interprocessor communication, and I/O subsystems needs to be justified by a scaling requirement that pays of the increased expense. There will always be some jobs that need a big box - just as there will always be jobs that need very high levels of reliability, and jobs that need huge (supercomputer) scale. But those are not growth markets. The question for SUNW is whether they can continue to sell the ability to scale from very small systems up to very large systems with a single architectural concept - which is very appealing to IT managers who don't know how big their apps will get - in the face of the big disparity in costs associated with going up that stack. The biggest market for that architecture is in the base of people who started off on smaller SUNW systems and had their businesses grow - which, as SUNW's performace has demonstrated, is a big market. But the people developing new systems have the economic model pretty clearly defined by what has happened over the last few years, and for many of them, the huge cost savings in the larger configurations are a justification to start off with a distributed design. This is hardly an open and shut case and will be a key battleground for the next few years. The part of your thinking that I was addressing was the notion that the big box players could "get performance that Microsoft could only dream of" by running distributed systems based on big iron - the economics work against that in a variety of ways and the trend is the opposite - going to smaller and cheaper boxes to get the best benefit from volume components once you have made the decision to bite the distributed bullet.