Friday, May 11, 2007


Microsoft Naysayer bandwagon gets crowded:

Sarah Friar of Goldman Sachs:
It's over after Vista.
Microsoft needs markets that can move the revenue needle.
Microsoft will be hurt by Linux, Apple and software as a service.
Microsoft can't be nimble enough to compete with Google.
Microsoft's messaging stinks. [what's "Live"?]

"It all seems a bit premature. Sure Google may be sexier–just ask the Microsoft employees that are defecting and burning bridges on the way out–but can you really say a company with $28.8 billion in cash is on the downswing? I can't."
-> ROE is 35+%. Should be able to repeat that
-> $17B 2006/7 spent on share buy-backs => propping up the share price

Chunks: hidden key to RAID Perf.
* Cache
* Striping
* Chunk Size [size of stripe on each drive]

Web DNA - Attributor:
-> Copyright Control, Monetisation On-line

Typical Linux Desktop User

2008 Year of Mobile Linux?

RedHat takes OLPC knowledge corporate: (one Laptop per child) Global Desktop

New Rules for Software VC.

Here is a list of must-haves to “jump start a startup” today and make it a candidate for venture investing.
* Begin with a first-class, seasoned management team

* Find a market undergoing demand growth where some form of disruption is creating a space for a new business

* Buy the components of the business – technology, distribution, customer base - that you can; only build what you have to (which usually does include building innovative technology

The Enterprise Software “Threatdown” [Top 10 threats]

1. Buyer Ennui
2. Looming Skills Shortage
3. Software Security
4. Usability
5. India’s IT Services Firms
6. Private Equity Plays
7. New ERP Challengers
8. The On-Demand Model
9. Mobile
10. Software Appliances

SandHill: The State of the Software Industry – 2007
Innovation Accelerating as a Top Priority
Internal Funding is Healthy -> revenue growing 9-13%
+ Margins are equally healthy. Megavendors (>$10B Rev) margins 35-40% EBITDA.
+ Margins rest 12-18%
+ software share of the customers’ IT budget will continue to increase
++ 2006: 29.6% expected 35.7% in 2009
External Funding Driven by Private Equity
+ Compound Annual Growth (CAGR) 26% in VC investment
Implications for Software Vendors and Customers
+ Customers: Customers have a paradox in front of them – how can a company that is increasingly spending their budget with the largest software vendors ensure they get access to smaller vendors who are driving innovation?
+ Vendors: Software vendors need to adapt to the bottom-up and center-out diffusion model within this innovation wave.

Sand Hill 30 - The stocks driving the next generation of software and services.

Pure-play software vendors whose every move shakes the industry.

Big Shots
Well-positioned, large vendors in healthy sectors.

Vendors with deep expertise and a strong market position.
Business Objects
Hyperion Solutions
Lawson Software
Tibco Software

New Big 5
The most powerful offshore IT services providers in the world.
Cognizant Technology Solutions
Infosys Technologies Ltd.
Satyam Computer Svcs.
Tata Consultancy Services
Wipro Ltd.

New Agers
Next-generation vendors leveraging new technologies and models.
Red Hat
RightNow Technologies
WebEx Communications

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