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Technology Stocks : PC Sector Round Table -- Ignore unavailable to you. Want to Upgrade?

To: Pierre-X who wrote (333)	5/8/1998 11:46:00 AM
From: Mark Oliver	Read Replies (1) \| Respond to of 2025

<Nowadays, the production cost is typically 20% of the total, and distribution is 80%. Ergo, increasing manufacturing efficiencies results in a much smaller impact. Pilzer predicted that the great fortunes of modern day would be the result of enhanced distribution processes. Ergo, Dell. (and Cendant, and Costco ...) Now, where does Microsoft fit in to this picture ...> There is the push to lower total cost of ownership that will be further implimented in next version of NT. I believe the code is Hydra. I will allow a global update of all software across the entire company from a single source. One of the goals is to get the illegal copies of software off systems. Still, being able to remotely boot all the computers across a system and change everything is pretty cool and terribly scary. Better be some good firewalls out there. I wonder if this includes VPN's? MSFT also claims the advantages of Win 98 and integration of the Net to down load version upgrades. It'll replace programs like Oil Change. Also, will let Big Brother know what's on your machine, if he doesn't already. So, we'll see a lot of distribution through the Internet. Another example, if I want to have a faster modem, for $60 3Com will do a software upgrade which will give me the next fastest version over 28.8. How's that for a low cost distribution? Still, your figures for cost reduction are interesting. Does this include reduced carrying costs for inventory, and faster product innovation? In technology, the fact that Dell only has to carry weeks inventory is amazing. With component prices falling in single digits weekly, that's big money. Regards, Mark

To: Pierre-X who wrote (333)	5/8/1998 12:32:00 PM
From: LK2	Respond to of 2025

PX, MSFT is not a typical manufacturing company from the early 1900s. I don't know what the technical economic term would be, but MSFT is a software company. Once the software is written, how much does it cost MSFT to produce a copy of Windows 95, a copy of Excel, or Word, or whatever? The cost of CD platter is what percentage of the selling price of the software program? Less than a dollar versus a selling price of $100, $200, $300+? In other words, once the initial development cost of the software has been recovered, the potential profit is enormous. Regards, Larry