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

To: Bearded One who wrote (15398)	2/2/1999 12:51:00 PM
From: ericneu	Read Replies (1) \| Respond to of 74651

> My premise is that the Win98 revenues essentially substituted for Win95 revenues. I think that if Microsoft didn't release Win98, but instead released a free service pack to go with Windows 95, then their quarterly results would have been substantially similar. That's a conjecture which can be proven or disproven by looking at how many upgrades from Windows 95 to Windows 98 were sold. From microsoft.com "Redmond, Wash., July 16, 1998 - Microsoft estimates that more than 1 million upgrade licenses of Windows 98, Microsoft's new consumer operating system that works better and plays better, have been obtained at retail by customers in North America since the product's June 25 release." Note that these figures are from less than one month after release. - Eric

To: Bearded One who wrote (15398)	2/2/1999 2:38:00 PM
From: DownSouth	Respond to of 74651

My premise is that the Win98 revenues essentially substituted for Win95 revenues. I think that if Microsoft didn't release Win98, but instead released a free service pack to go with Windows 95, then their quarterly results would have been substantially similar. From the most recent quarterly report: "Platforms product revenue grew 50% to $2.32 billion in the second quarter. Windows units licensed through the OEM channel, particularly Windows NTÒ Workstation, increased strongly over the prior year. Organizational licenses of these desktop platforms also contributed to the growth. Windows NT Server revenue was quite healthy. Windows CE and WebTV™ service continued to show strong revenue growth, although small in amount." I am willing to join in your conjecture that Win98 substituted revenues that would have been realized from Win95 through OEM channels. Plus, Win98 upgrades were similar to a Win95 service pack, BUT there were probably many more Win98 upgrades than is the same product had been released as a service pack. Plus the Win98 upgrade was a revenue producer, as opposed to what a free service pack would have been. I recall a series of postings from you and/or ToySoldier where the conjecture was that Win98 would not be adopted en masse by the corporate and government installed base. I contended that it would be adoptped en masse my the major corporations and government agencies. It WAS adopted en masse by large customers and others as well, as demonstrated by a 50% increase in platform revenues. Win98 was a huge success. It didn't fall on its face, despite the bad press that appeared in the weeks following its low-key roll-out. Now you contend that Win2K is in trouble, as evidenced by the large amount of resource that MSFT is putting on the project. I say that commitment is evidence of the fact that MSFT wants to deliver the product as soon as possible. That is good for MSFT customers and shareholders. What would you have them do? Perhaps NOT put the resources required to deliver the product this expeditiously, loosing credibility and revenue. You contend that putting more engineers on the Win2K project is counterproductive--that more programmers does not mean more productivity. I think you would find that Win2K in structured such that teams can work on different modules with minimum impact on other teams. So more teams working on the modules will result in more productivity and faster product production. Win2K will not be a service pack, I am sure you will agree. I expect sales of Win2K to be very high, as enterprises will want to upgrade Win95/98 by end of year '99. Introduction of new PIII CPUs from INTC and new RAMBUS memory in 2H99 will also result in a new wave of PC sales, thus the OEM channel demand for Win2K will ramp up. Office2K will be a huge success, as it appears to offer new levels of functionality related to internet. Plus, Office 95/97 users have historically upgraded just to get the latest stuff, rational or not.