Subject: Re: A few here may have an opinion on this
From: Chris Maeda <>
Date: Thu, 24 Oct 2002 11:38:42 -0700

I looked up MSFT's latest financial release
(operating results for Sept 02 quarter, Oct 17).
They had $7.4B revenue and $2.7B net income.
EBIT was $4B and they paid $1.3B in taxes.
In the Sept 01 quarter (a really bad quarter)
EBIT was $1.9B and they still paid $600M in taxes.
Do you still think that proprietary software is not
a great business model?

(EBIT = Earnings Before Income Tax)

At 10:22 AM 10/24/2002 -0400, Forrest J. Cavalier III wrote:
> > Yes.  I have a student who has figures that say that in Japan, where
> > overall investment has an internal rate of return (IRR) of about 20%,
> > IT as a whole has an IRR of 75%, and software has an IRR of 200%.  We
> > know that both the IT and software numbers are huge overstatements,
> > but we expect the qualitative result (IT is "much more" productive
> > than general investment, and software "much more" productive than
> > hardware) to hold up.  So ...
>I would think the numbers can't be true on average, or the only
>business left in the world would be software business.  VCs would
>only fund software businesses. Besides, the proprietary software
>business can't be that great if the prime example MicroSoft usually
>fails to have enough profit to pay taxes on.  :-)