A very interesting and controversial article seems to have come up on slashdot: Silicon Insider: R.I.P Microsoft. Written by a veteran Silicon Valley Journalist, Michael Malone, the article muses on whether MS is on the verge of a collapse!. Though shocking and improbable at the very least, the tech industry is one place where its almost impossible to predict anything.
Some very interesting tips in the article on how to assess the potential of tech companies - for an enterpreneurial company: "...one of the tools I'm best known for is Folding Table Theory of Start-Ups. It says that when you walk into a new entrepreneurial company and you see a nice lobby and expensive office furniture, that company has its priorities screwed up -- either it is more interested in comfort than success or it is over-capitalized and lazy -- and it will never make it.
By comparison, when you see the start-up team working at folding tables or old army surplus desks, you know that it is properly focused both on getting the job done and financial discipline -- and has a good chance of being a winner. That's what I saw at the beginning of eBay (and Siebel, Tivo, Electronic Arts, Atari and a host of other great companies)"
On Microsoft and similar behemoths - "...Great, healthy companies not only dominate the market, but share of mind. Look at Apple these days. But when was the last time you thought about Microsoft, except in frustration or anger? The company just announced a powerful new search engine, designed to take on Google -- but did anybody notice? Meanwhile, open systems world -- created largely in response to Microsoft's heavy-handed hegemony -- is slowly carving away market share from Gates & Co.: Linux and Firefox hold the world's imagination these days, not Windows and Explorer. The only thing Microsoft seems busy at these days is patching and plugging holes."
Interesting about the kind of vibes that veteran people seem to look for in a company - some time back I attended an equity research contest at spjain - the jury was pretty impressive, chief investment officers of a lot of big funds. Their advice to us was telling - they told us that more than all the financial FCF valuation and the monte-carlo simulations, it is the softer aspects, the culture of the firm, the management team and a feel of the work the company is doing that determine the true value of a firm.
The above hints that Malone says he looks for are interestingly similar.