Slashdot Mirror
OSS Officially On Microsoft's Financial Radar Screen
seldo writes "More news from Microsoft's latest quarterly filing: according to eWeek, Microsoft says it may have to lower its prices in response to competition from open-source software. From the filing: "To the extent the open source model gains increasing market acceptance, sales of the company's products may decline, the company may have to reduce the prices it charges for its products, and revenues and operating margins may consequently decline". This is a fairly major revelation from Microsoft, and if it happens, it may be one of the biggest wins yet for open-source software: what do you know -- competition works!"
Microsoft knows that they are doomed (that's why Bill Gates and all the other executives with a clue sell thousands of shares each month) and that it's right now just a matter of how much they can milk out of their customerbase.
Ummm... Gates sells "thousands" (he actually sells about a million) of shares every month because 1) He's got 600 million of them gathering dust, 2) MSFT didn't start paying dividends until recently (even at $0.16/share that's only $96mm per year), and 3) the guy needs to live. Can you get by on a mere $96 million per year? I didn't think so.
Gates sells a fixed amount of shares every month - he always has and likely always will. One major reason is so that people can't draw weird conclusions from his personal stock sales.
When you have nothing left to burn you must set yourself on fire
Microsoft has only two profitable products (Office and Windows) that strongly depend on each other.
I adore how cute it is when some FUD is propagated on Slashdot, and soon you can hear it being repeated verbatim as stone-cold facts time after time by Slashbots. Microsoft has three profitable divisions: Client, Server Platform, and Information Worker. I'm hardly surprized that some dullards interpreted that as "Office and Windowz!", yet in reality those three divisions account for the overwhelming majority of products with the Microsoft name on it. SQL Server? Yup. Visual Studio? Yup. Visio? Yup. SNA Server? Yup. Indeed, if you looked within even the unprofitable divisions you would find a bevy of highly profitable items: The Home and Entertainment Divison encapsulates Microsoft hardware, such as mice and keyboards, which themselves are highly lauded and tremendously profitable, however their profitability is being masked by the xbox.
This is all so laughable anyways, and indicates the core naevity of most open sourcers. Egads Microsoft mentioned open source! The reality, of course, is that such filings must include forward looking risks of any sort, including potential lawsuits, and envisioned risks by the pundit community. The fact that open source is mentioned in there is a given. To make this even more hilarious, though, the prior quarterly report included the same risk statement, while the quarterly report before that included the statement "the availability of competitive products or services such as the Linux operating system at prices below Microsoft's prices or for no charge" as a risk factor. Looking at the annual report from 3 years ago yields the statement "With an increased attention toward open-source software, the Linux operating system has gained increasing acceptance. Several computer manufacturers preinstall Linux on PC Servers and many leading software developers have written applications that run on Linux. Microsoft Windows operating systems are also threatened by alternative platforms such as those based on Internet browsing software and Java technology promoted by AOL and Sun Microsystems. " and " The Company continues to face movements from PC-based applications to server-based applications or Web-based application hosting services, from proprietary software to open source software, and from PCs to Internet-based devices.". I'm sure I could go back two more years and find similar forward looking risk statements.
I suspect that someone read an SEC filing for the first time in their life and thought they found a real revelation (as did the Slashdot editors when they posted this), when it's the same thing that has appeared in their filings for years now.