[PLUG] Microsoft Earnings Report

Phil Tomson ptkwt at aracnet.com
Thu Oct 23 13:51:01 UTC 2003


On 23 Oct 2003, D. Cooper Stevenson wrote:

> All,
> 
> Shares of Microsoft common stock are down today on the heels of their Q4
> earnings report:
> 
> http://sec.thomsonfn.com/sec/SecProd?pid=MzgwYlhOdVAkWQEQUALSTOEQUALSTO&transform=result&type=results&doc_type=REGST&doc_dcn=03948319&cont_format=HTML&cont_qualifier=C&doc_product=E&viewer=N#r4
> 
> Here are a few highlights:
> 
> "As a result of challenges to our business model, sales of our products
> may decline, we may have to reduce the prices we charge for our
> products, and our revenues and operating margins may consequently
> decline. Since our inception, our business model has been based upon
> customers agreeing to pay a fee to license software developed and
> distributed by us."
"And by us only."  But now some of those pesky customers are getting 
wise.

> 
> Also...
> 
> "In recent years, there has been a growing challenge to the commercial
> software model, often referred to as the Open Source model. Under the
> Open Source model, software is produced by loosely associated groups of
> unpaid programmers, and the resulting software and the intellectual
> property contained therein is licensed to end users at substantially no
> cost. The most notable example of Open Source software is the Linux
> operating system. While we believe that our products provide customers
> with significant advantages in security and productivity, and generally
> have a lower total cost of ownership than Open Source software, the
> popularization of the Open Source model continues to pose a significant
> challenge to our business model, including recent efforts by proponents
> of the Open Source model to convince governments worldwide to mandate
> the use of Open Source software in their purchase and deployment of
> software products. To the extent the Open Source model gains increasing
> market acceptance, sales of our products may decline, we may have to
> reduce the prices we charge for our products, and revenues and operating
> margins may consequently decline."

Translation: "We might actually have to compete for the first time since 
we killed off that other browser thingy."


So they're finally starting to admit that we're hitting them where it 
hurts.  ;-)

Phil





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