Mr. Chowdhry: I think we need to focus on five companies, which are in the midst of some shifting market dynamics: Microsoft (MSFT) being one, VMware (VMW) being another, Oracle (ORCL) being another, Red Hat (RHT) being another and Sybase (SY) being another.
TWST: Why those five?
Mr. Chowdhry: I think these five companies are, I would say, in a market - no, I
should say they are in the purchasing trend for the IT managers, which are
secular trends, but they're not short-term trends, but they are, I would say,
mid- to long-term trends that we are seeing in the purchasing cycle that may
benefit all the five companies I mentioned.
TWST: What's driving that purchasing cycle?
Mr. Chowdhry: So the first one is Microsoft. Contrary to what people believe, we
definitely see that there is a very vibrant ecosystem still prevalent for
Microsoft. The installed base of Microsoft just needs a small tailwind to go for
a very massive upgrade cycle that is going to occur starting October of this
year and going into September of next year, that is 2010. These upgrade cycles
are: on the desktop side, Windows 7; then on the cloud side, in the month of
October/November, its Azure cloud platform that will be launched. Then going
into early next year, it's the launch of Exchange 2010; then later, mid-2010,
there's a launch of Sequel Server 2010. Taken all together and considering the
fact that there is a regulatory pressure for the existing customers to upgrade
to the new products for compliance reasons, I think the upgrades would be big,
taking into the fact that economy is still struggling. So that is the key thing
for Microsoft: very strong product line, the installed base needs to upgrade
because of compliance and regulatory reasons, and probably the upgrade cycle
will last for - I mean, it starts from October and probably the new product
cycles continue to be delivered in the month of September of next year. Then the
other thing on Microsoft is the cloud platform, which is experimental right now.
But definitely there's a trend we need to keep a focus on. The trend here is a
shift from CapEx to OpEx. So Microsoft has its feet in both camps, the
traditional camp and the emerging camp, which should benefit them from a long -
mid- to long-term perspective.
Tickers included in this excerpt: GOOG, MSFT, ORCL, RHT, SY, VMW
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