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

To: Bearded One who wrote (8366)	6/9/1998 5:31:00 PM
From: Brian Malloy	Read Replies (1) \| Respond to of 74651

Libertarians choose sides as antitrust case expands Federal trustbusters, by wading into the world of computers with the latest antitrust actions against Intel and Micosoft, have wandered straight into the hotbed of libertarian political activism -- cyberspace. msnbc.com

To: Bearded One who wrote (8366)	6/9/1998 10:32:00 PM
From: Bill Fischofer	Respond to of 74651

The two positions are not at all contradictory MSFT is to be sure dominant but in what sense is it a monopoly? Are there laws preventing competing products from being brought to market (a la the old AT&T)? Is their position and return on assets mandated by some governmental body (like your local water utility)? Are there no competitive alternatives to their products which customers could purchase should they chose to do so? (MacOS, OS/2, Linux, Solaris, etc.) Please explain what you mean by a monopoly in this context. MSFT and SUNW are natural competitors because the PC market is constantly crowding out the lower and middle ranges of SUNW's market. PCs have already made major inroads into the technical workstation market and the low end server market and there is no reason to suppose that this trend will not continue. As the lower and middle tiers of the market get swallowed up, SUNW will find itself in what Ed McCraken (former SGI head) prophetically called the "high end graveyard". Ultimately this will force SUNW into head-to-head competition with IBM in the glass house and that's where the cozy "all-together-against-big-bad-MSFT" alliance will crumble. Meanwhile the Wintelpaq juggernaut will continue its relentless march upscale, backed by technical and financial resources that dwarf anything SUNW or IBM can muster. [If IBM could ever swallow its pride they'd buy SUNW and retire their aging S/390 line but they'll hold on to the bitter end (around 2005-6) before being plowed under.] Where do SUNWs profits come from? Despite McNealy's brave words that SUNW is a software company, virtually all of SUNWs revenue and profits come from its hardware business. The PC market is relentlessly competitive and there is no way for SUNW to avoid the margin vise that will continue to squeeze its bottom line. In the meantime, I'm still waiting for SunSoft/JavaSoft's contribution to amount to more than a footnote to SUNW's financials.