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Technology Stocks : George Gilder - Forbes ASAP -- Ignore unavailable to you. Want to Upgrade?

To: James Connolly who wrote (835)	11/29/1998 9:36:00 PM
From: Dovi	Read Replies (1) \| Respond to of 5853

George, Based on my reading of the October issue of the GTR, you may want to reconsider your inclusion of Sun on the list of companies with "Ascendent Technology." KE's informative chart and accompanying summary show that Sun's share of the web server market is beginning to drop as NT gains popularity. As the overall growth of the web server market slows (OK, that may not be for a few years) Sun may see declining revenues from its web server business. Revenues are already decreasing in its workstation business. This appears to me to be a classic situation described in the Innovator's Dilemma. Sun has staked out a claim to the high-end of the market but is being squeezed by competition that started from the bottom of the market and is quickly working its way "up-market." Using Christensen's theory, the success of their high margin server and workstation business may prevent Sun from effectively combatting ever more robust products from low-end competitors with "inferior" products. Similarly, Sun's recent introduction of high performance web servers can be viewed as merely a "sustaining" technology. In the October issue you write, "Digital's customers, for example, had no interest in personal computers, which could not execute any Digital software and were inferior in every way except price." Wouldn't Sun's high-end customers say something similar about NT? Would like to hear your thoughts on Sun and the implication of KE's statistics and Christensen's theories. Thanks in advance. Regards Cameron Smith