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

To: Hal Rubel who wrote (8041)	5/26/1998 9:44:00 PM
From: Alan Buckley	Read Replies (2) \| Respond to of 74651

[What competition does Microsoft permit on Wintel boxes? Just who is the competition? I keep forgetting.] And very conveniently forgetting at that. You define the market as "Wintel" (Windows on Intel), then claim non-competition because MSFT fills the demand for their own systems. What twisted nonsense. In the PC market, the answer includes OS/2 (by that company with 10 times MSFTs revenues) and Linux (that product cheaper than MSFT could ever afford to offer). But, of course, those doesn't count as competition or choice because that doesn't fit your argument. Now, let's look at what competition SUNW allows on their hardware or AAPL allows on theirs. None, zero, zilch. Each has a total monopoly on their system's hardware. Explain why the PC platform, the one NOT controlled by a single company, deserves special government attention. If Java was as good as SUNW claims it is, it would be flying off the shelves, but you know what? It's not. If IBM supported external software developers like MSFT does there would be more applications for OS/2, but you know what? They don't. If AAPL allowed clone makers to build Mac hardware the cost to consumers would plummet, but what did they do? They pulled the cloner's licenses. MSFT is being attacked because they are winning and nothing more. Their business practices are as clean or better as their competitors. The US government is now in the business of subsidizing losers at the expense of producers and consumers. The wishy washy arguments the DOJ is using could be applied to any successful company, and that is what is truly frightening.

To: Hal Rubel who wrote (8041)	5/26/1998 11:00:00 PM
From: Dwight E. Karlsen	Read Replies (1) \| Respond to of 74651

Just who is the competition? Netscape & Sun for two. Sun just claimed early this morning via a press release from Singapore that "it won't matter whether or not we win our lawsuit against MSFT. In a few years Java will be in more devices than Win95/8 is in now." I'm not sure if Netscape qualifies as legit competition, but they thought they were, for a while there, when the golden halo surrounded their stock. Remember when NSCP sported a PE ratio of 999? I do. And I remember James Barksdale rationalizing that price to a group of reporters. Fine. Whatever. "Kill Microsoft" Yeah. That too.

To: Hal Rubel who wrote (8041)	5/27/1998 1:45:00 PM
From: Carlos Blanco	Respond to of 74651

>RE"Dominant firms like Microsoft can only remain so if they are truly competitive." Competitive? If it does not have competitors, how competitive is it? What competition does Microsoft permit on Wintel boxes? Just who is the competition? I keep forgetting Even if there are no directly comparable alternatives to a product, competition always exists in the form of available capital. Capital will flow to where profits can be made. If Microsoft ever charges an excessive premium on anything it sells, you can expect alternatives to arise to take advantage of such a pricing discrepancy. Where "excessive premium" equals the R&D and manufacturing costs of a product that has the required functionality to act as a substitute. In the case of Windows, there are over 10 years of R&D built up into the product, hence it's not surprising that priced at $109 no one is currently interested in developing a substitute. This is the expected marketplace behavior. The three variables that determine the likelyhood of additional entrants are whether added Windows functionality also adds value as perceived by the consumer, whether consumer functionality demands go down or up (eg. bare-bones internet browsing could become sufficient, in which case the perceived value of Windows goes down), and whether the price of the product rises or stays the same. Again: there will always be competitors to any product as long as capital exists and can be freely deployed. The only time capital can't enter a market is when someone has been granted special status as enforced by the government (regulated monopolies, patents, etc.). >PS: This article relates in part to J. P. Rockefeller's Standard Oil by claiming that it was a model corporate citizen. None the less, Standard Oil took the big fall. This raises the alarming question: Are good intentions even relevant as a defense when a Monopoly grows beyond a certain size? Whether intentions will be relevant or not is highly subjective; the judge(s) are the individuals who will get to make make that decision. Presumably the judicial system will come to a fair conclusion. If we can't depend on the judicial system reaching correct conclusions most of the time, we might as well go live somewhere else. --Carlos

To: Hal Rubel who wrote (8041)	5/29/1998 12:22:00 AM
From: Hal Rubel	Read Replies (1) \| Respond to of 74651

The Microsoft Competitive Mindset Here is a mildly relevant view of the Microsoft mindset as revealed to an outsider, Chip Anderson of the TDFX board: Re: Intel/MS Competition (vs TDFX) Again, this is totally my opinion/feeling/gut reaction to lots of little things that I've heard and seen so far. As I mentioned (but forget to expand on, sorry) I happened to sit next to the D3D lead on the plane ride from Seattle. He said that TDFX has historically dragged it heels on updating their D3D drivers, that they've avoided including obvious performance tweaks in order to make D3D look bad, and that TDFX has not actively participated in improving D3D. Now, you have to take some of that with a grain of salt. MS feels that they should control every software API on the planet including the 3D API. Obviously, 3Dfx feels differently. However, because of Voodoo's huge lead, the other 3D card vendors are now extremely supportive of D3D (to the point of putting it in their silicon). The MS guy said that everyone except TDFX is very easy to work with - no real surprise there. I was left with the impression that MS is actively campaigning against Glide behind the scenes. They'll never admit it, but its happening. All it takes is even _rumors_ of other hot graphics hardware and the game developers will play right into MS' hands ("Use D3D and you won't have to port your game to card X. We'll even give you software rendering for free!") - and I found strong evidence of their pitch working when I talked to developers today. Also, there's the WinCE-as-a-gaming-platform-for-Sega thing: The TDFX developer relations guy seriously said that Glide will become a complete gaming "platform." MS thinks that WinCE is a viable gaming platform. Believe me, "platform" is a word that sets off tons of alarm bells in Redmond. On the Intel side, Intel's marketing emphasis on high performance 3D graphics is very obvious at their booth. It's everywhere. My impression is that they are learning from the 740 and will improve it big time to help drive CPU sales. Finally, TDFX is getting cozy with AMD - a major untolerable sin as far as Intel is concerned. So, my _impression_ is that Intel and MS are slowly getting more and more irritated with TDFX. Rightly or wrongly, Wall Street typically reacts negatively when that happens. Chip