[NCLUG] Microsoft's new challenger: Moore's Law

[John L. Bass]

	Eric Raymond was predicting this a couple of years ago, though I can't find
	a link to the article. When hardware manufacturers stop shipping microsoft
	apps, microsoft profits will fall dramatically. Their stock price will
	fall, and they will lose all of their programming staff as they realize
	they don't have to stay to keep their options... sometime later, total heat
	death of the universe.

	Evelyn Mitchell

Similar things were predicted about other segments of the market that never came to
pass in their entirity. There are a number of business software packages that are
priced 10x to 100x the price of the hardware today, that are just the cost of doing
business for that application.

MS Office is a mature cash cow, and has been for many years. The staff size supporting
it can fall to match adjustments in pricing and still remain wildly profitable. I
would not be suprised at all if MS responds to Linux vendors bundling OpenOffice in
the base release, by also bundling MS Office in a Window's Professional Release.
Not that different than MS responding to Apple bundling Claris Works for home systems
a decade ago, which spawned a number of home systems being packaged with MS Works.

It's almost certain that MS will down size, and in the process a number of engineers
will not have the option to collect their options. As long as price to earnings and
their market size doesn't shrink by more than 60%, their stock will ride out of this
down turn with pretty much the same dynamics as the rest of the market. There will
be a new wave of new system sales as cash frees up during the recovery, and we will
start another product boom cycle. As long as MS matches staff to revenue, it's stock
will remain relatively stable. If MS continues to put it staff in full out research
and development during down turns, it will continue to meet each recovery with new
product offerings that both advance the state of the art and maintain the value of
their market holdings.

John