Food for thought...

Article: Cavium MIPSes Network and Security Processing
By: theo nordsieck (, June 19, 2006 8:48 am
Room: Moderated Discussions
Dean Kent ( on 6/19/06 wrote:
>David Kanter ( 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...

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.
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TopicPosted ByDate
New Article Online; Cavium Networks OCTEONDavid Kanter2006/06/12 09:14 PM
  New Article Online; Cavium Networks OCTEONRob Thorpe2006/06/13 01:08 AM
  New Article Online; Cavium Networks OCTEONPiedPiper2006/06/13 07:36 PM
    New Article Online; Cavium Networks OCTEONDavid Kanter2006/06/13 09:54 PM
  New Article Online; Cavium Networks OCTEONmas2006/06/18 11:29 AM
    XLRmas2006/06/18 12:06 PM
      XLRmas2006/06/18 01:41 PM
        RMI: Tall talesChuck2006/06/19 05:45 PM
          Are you sure?David Kanter2006/06/19 07:33 PM
    New Article Online; Cavium Networks OCTEONmas2006/06/18 12:50 PM
    Security processorsDavid Kanter2006/06/18 02:52 PM
      Security processorssubmicron2006/06/18 10:09 PM
        I'm not so sureDavid Kanter2006/06/18 10:36 PM
          Food for thought...Dean Kent2006/06/19 06:35 AM
            Food for thought...theo nordsieck2006/06/19 08:48 AM
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