[LINK] Microsoft gets away with one

[Viveka]

At 7:09 PM +1000 14/9/02, Ash Nallawalla wrote:
>  > From: Rachel Polanskis
>  > The fact is that their stock price is quite strong for a tech company
>>  compared to many others taking a big hit at the moment. 
>>  I wonder why this is?
>
>That's like wondering "Why is RHAT so strong when SUN is weaker?"
>http://finance.yahoo.com/q?d=c&c=SUN&k=c1&t=1y&s=rhat&a=v&p=s&l=on&z=m&q
>=l&y=on&w=on

There is a clear market shift towards more open technologies. The 
market is now educated about issues like vendor lock-in and open 
standards; every technology buyer at least is aware of them, whereas 
a few years ago they were relatively unknown issues.

Sun was a strong proprietary UNIX vendor; their stock once made a lot 
of sense. Given the entrance of a new major competitor into their 
market (Linux in its various forms), they can go nowhere but down, 
unless they show some very creative thinking. They seem to be doing a 
pretty good job of adapting to the new environment, which keeps them 
from tanking completely.

Redhat is the strongest brand in a new market entrant (Linux), and 
brand value is the key differentiatior for open source companies. 
Since all players in open source are collaborating on a shared 
technology platform, it's the successful integrators and brand 
marketers who stand out. Redhat is riding a wave, they have lots of 
untapped market share to gain, and the economic downturn plays into 
their hands, since they're offering a commodity solution with much 
lower volume licensing costs than companies like SUN. Redhat is 
likely to grow their market share and profitability, and the stock 
market likes that.

I believe that Microsoft stock is still strong because they're 
fighting the open movement very effectively. They've realised that 
Free Software has several market advantages in the current 
environment, so they're working on changing the environment. In the 
name of "levelling the playing field", they're lobbying governments, 
putting together various astroturf campaigns, and associating 
themselves with Democracy, Freedom and Security in order to make it 
seem like anything that damages MS would damage the US, and must 
therefore not be allowed to happen. They've always been a friend of 
the copyright extension lobby, and they're unquestionably providing 
useful back doors to the three-letter agencies, so they have powerful 
friends. Microsoft is not going anywhere in a hurry, so I'm not 
surprised that their stock is holding up.

Regards,

V.
-- 
Viveka Weiley, Karmanaut.
{ http://www.karmanaut.com | http://www.planet-earth.org
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Hypermedia, virtual worlds, human interface, truth, beauty.
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