http://www5.zdnet.com/anchordesk/story/story_930.html
How Microsoft Will Gut IBM and Sun
by Jesse Berst, Editorial Director
ZDNet AnchorDesk, Monday, May 19, 1997
On Tuesday, Microsoft hosts "Scalability Day." With the help of partner
companies, it will try to prove that Windows NT is highly scalable that
NT can start with small workgroup applications and grow all the way up
to large enterprise computing.
On Wednesday, IBM, Sun and other Microsoft competitors will hold
"Scoffability Day." Terrified at the progress of Windows NT (which now
outsells all flavors of Unix combined), they will mock Microsoft's
claims. They will point out that scalability is worthless unless
combined with availability, reliability, manageability and security.
They're absolutely right.
And they're doomed anyway.
Scalability refers to the capacity to start small and then grow big
without starting over. IBM doesn't have any trouble with the "grow big"
part. Its host computers can handle more work, more transactions, more
users than any Windows NT system. It's the "start small" part where IBM
falls down. IBM hardware and software is far too expensive and too
difficult. This lack of a low-end starting point is the key to the
"surround strategy" that will let Microsoft gut IBM's enterprise
business over the next five to seven years. (Sun is in a similar
position.)
Microsoft's opportunity isn't in the few thousand high-end systems that
sit at Fortune 500 headquarters. It's in the tens of thousands of
departmental and workgroup servers that connect to those central host
systems. As Gartner Group vice president Scott Winkler puts it (see
stories linked in sidebar), Windows NT is scalable enough for "80-90% of
the existing applications."
Microsoft intends to swallow up that 90% over the next few years. Then,
and only then, will it pursue the remaining 10% at the very high end.
After those high-end systems are surrounded by NT servers. After NT has
had another five years to grow up and improve.
When I asked IBM representatives whether they would be lowering prices
to counter Microsoft's surround strategy, they responded with cliches
about their company's track record. Sun is also moving away from the low
end. Neither one of them gets it. But they will. In about five years,
when Windows NT is the leading enterprise operating system. When their
expensive legacy systems have been painted into a high-end corner. When
it's too late.
When that happens, remember back to this day. When IBM and Sun could
have turned their fortunes around. But didn't. Because they were too
busy scoffing when they should have been lowering prices.
Is there any hope for IBM? Or Sun? Will they ever figure out that
Microsoft is eating their market from the low end? Join the discussion
under way now in our Jesse's Berst Alerts forum. Or just click the Talk
Back link at the bottom of this page to send us a letter directly. We'll
post the best responses right beneath this story.
----
adam@cs.caltech.edu
The sooner all the animals are extinct, the sooner we'll find their
money.
-- Ed Bluestone, National Lampoon