Dennis Byron

False Data Clobbers the Markets

Great perspective. However the alternative to not releasing preliminary data is trading by insiders (not necessarily management but just those that know sooner than others). Transparency trumps perfect timing.

In my little niche, the software market, we see a variation all the time. It's not a matter of false data but no data. The pundits say:
-- Microsoft is in an end-game state (except that it is growing as fast or faster than all the other leading software suppliers except Google and is active in all the likely future technology trends, not just Search, leading in some of them)
-- SaaS is taking over the software world (except there is no data to back up that claim even though SasS--nee ASP--has been out there for 10 years, or more depending on how you count)
-- Cloud computing is the next big thing (except it has been around for 50 years)

We Need a Digital Bill of Rights

Eric

Re: your digital bill of rights idea, the current one does the job just fine, thanks.

When you say "We need..." and then talk about the U.S. election, I assume you are talking about the US and not some "oneworld" idea you have blogged about previously. I'm sorry to see such European Union communalism (seekingalpha.com/artic...) infecting SV. So much for starting a company in your garage and waking up one morning with a 12-meter ocean racer in the Bay.

Specifically you say,

"When the economics of scarcity no longer apply, consumers start to behave differently. They copy and reuse content in unforeseen ways. The pendulum has swung so far that normal consumer behavior has now been criminalized."

That's typical EU blogobull. Taking some one else's digitized intellectual property is no different than sneaking into the movie theater through the fire escape or shoplifting in the video store. I agree it's no big deal. But it's wrong.

As for what Amazon and Apple can do with/to content you purchased and put on their service-delivery device is their prerogative. You affirmatively chose to abide by the Ts&Cs of their service. You didn't buy a product from them; drop their service if you object. You can't screw up regular utilities either with some appliance you purchase.

As for net neutrality, I never heard that anyone was proposing to take away the free flow of information. I thought they just want to offer services that make the flow faster if I want to pay for it. I may be wrong on my understanding of the issue but the current laws would protect me given anything I can think of Verizon or Comcast doing. In fact, the bigger risk is the one that you're proposing: letting the government get too involved.

In your last paragraph, it sounds like you want a "do not email" list. Why do we need to change the bill of rights to do that?

Finally nothing is better protected by the current Bill of Rights than privacy. Got an issue; make a federal case out of it. You don't need a new law to do that. By the way, I assume you are not proposing to go through that awkward constitutional protocol of getting your rights enshrined through an amendment.

Apple Envy Seizes Microsoft

This is a great review of Microsoft but unfortunately from an investment perspective I feel that it covers only one-quarter or one-fifth of the Microsoft problem . The observation vis a vis Apple applies to Microsoft's consumer-gadget business but the bigger issue is that Microsoft is having a hard time focusing on what business it's in these days (and how it will "model" that business).

There is also Microsoft's enterprise software business (made up of two or three pieces depending on how you cut it) and its consumer-content/searc... business. So as I commented on at informationarbitrage.c... (Roger Ehrenberg's home page) back at the time of the first article he mentions as well as in my own research on the Microsoft 10K at itinvestmentresearch.c..., Microsoft has to make its mind up vis a vis what business it's in as well as focus on a delivery model.

In terms of businesses, I think it's spread too thin, competing with

-- SAP, Sage, Intuit, Lawson, Infor and others in enterprise applications (this is the convetional wisdom candidate for the business it should get rid of)
-- Oracle, IBM, BEA and others in enterprise middleware
-- All variations of the UNIX/Linux world in operating software with all of the increasingly effective attacks by its open-source-software-b... competitors (this is my candidate for a business that it can gracefully exit depending on the delivery model decision)
-- Google and others in content/search
-- Apple in consumer gadgets as described here

The main problem is that Microsoft hasn't decided how to deliver its value proposition to the markets represented by these businesses. Will Microsoft be a technology provider or a services provider?

-- Technology provision is increasingly a low-margin game. Microsoft could be good at it but culturally, it's not "cool."
-- Or will Microsoft go "... Live" full bore. I have been an Office Live beta user for 9 months and I can tell you Microsoft really doesn't have a clue how to be a services provider YET.

From an IT Investment Research perspective, we all knew there would be problems with Vista's late delivery and slow ramp-up re CY 2006 and FY 2007. That's the source of the Apple envy. But with the Vista launch, Microsoft was more like GM in the early 1960s than Apple in the 1990s (or IBM in the 1980s). Microsoft is still flacking the fins on the back of the cars and the 400 cubic-inch engines when it should be downsizing both itself and its "cars."

And it should be coming up with a value proposition that either highlights the dashboard and rack and pinion steering, or the quality of the chauffer and speed by which it can get you from here to there. It probably can't do both.