Jon, are software sales still closely tied to PC sales? Whats the current trend?
It depends on the software. Clearly, Microsoft is highly correlated to PC sales, but other enterprise-software companies are more dependent on IT spending and specific projects. For example, BEA is more dependent on software infrastructure projects, which typically are lengthy and expensive. Thus, BEA is more dependent on a loosening of the purse strings for IT budgets than PC sales specifically. However, as IT spending improves, PC shipments should also benefit. Q: How much of a factor in software markets now is the obsolescence of hardware and software bought for Y2K? A: Again, it depends on the specific area of software. Clearly, Microsoft is seeing solid demand for its Office products and Windows operating systems. However, in the broader enterprise-software industry, there’s still some excess capacity being worked off, and companies have been cautious with their spending allocations because they overspent so much in the late 1990s and in 2000. So while IT spending has been picking
