Food for thought...

Article: Cavium MIPSes Network and Security Processing
By: theo nordsieck (dont.delete@this.spam.me), June 19, 2006 9:48 am
Room: Moderated Discussions
Dean Kent (dkent@realworldtech.com) on 6/19/06 wrote:
---------------------------
>David Kanter (dkanter@realworldtech.com) on 6/19/06 wrote:
>---------------------------
>>
>>I have some ideas on what Intel and AMD should do, but I haven't really thought
>>them out well enough, and I think it could make a good article.
>
>Just for another perspective, I happen to know of a somewhat largish software company
>(several billion per year). The revenues for that company are about 50% mainframe,
>50% 'open systems'. It was stated by someone in the know that the mainframe products
>(legacy stuff) actually are the most profitable, and for all practical purposes
>fund the 'open systems' stuff (Windows/Unix/Linux). Whether this was stated for
>'effect' or was, in fact, entirely accurate, I don't know - but I suspect there
>is more than a single grain of truth to it.
>
>So, the question for a business is this: Do you jettison your unprofitable products
>that are supposed to be your future, or do you keep them and drive the share price
>down because investors aren't seeing the profits they want to see?
>
>Techies choose the future, while business people tend to follow the money...
>
>Regards,
>Dean
>
>>
>>DK

I think the solution deriving from "the innovator's dilema" is to spin off a company that tries to capitolize on the lower-end/less profitable market. That way the parent company can keep the high ASPs/cost structure for up-market products, but still invest in R&D in the low end effectively.
< Previous Post in Thread 
TopicPosted ByDate
New Article Online; Cavium Networks OCTEONDavid Kanter2006/06/12 10:14 PM
  New Article Online; Cavium Networks OCTEONRob Thorpe2006/06/13 02:08 AM
  New Article Online; Cavium Networks OCTEONPiedPiper2006/06/13 08:36 PM
    New Article Online; Cavium Networks OCTEONDavid Kanter2006/06/13 10:54 PM
  New Article Online; Cavium Networks OCTEONmas2006/06/18 12:29 PM
    XLRmas2006/06/18 01:06 PM
      XLRmas2006/06/18 02:41 PM
        RMI: Tall talesChuck2006/06/19 06:45 PM
          Are you sure?David Kanter2006/06/19 08:33 PM
    New Article Online; Cavium Networks OCTEONmas2006/06/18 01:50 PM
    Security processorsDavid Kanter2006/06/18 03:52 PM
      Security processorssubmicron2006/06/18 11:09 PM
        I'm not so sureDavid Kanter2006/06/18 11:36 PM
          Food for thought...Dean Kent2006/06/19 07:35 AM
            Food for thought...theo nordsieck2006/06/19 09:48 AM
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