i’ve got more programmers than you:
“One of the things to take away from this is that EDS has very thin gross
and operating margins. Further, if a free software business based on
services wants to do some development and contribute back, that R&D line
is going to have to go up to at least 1% or 2%. That’s going to reduce
operating margins to 7.4%. At 7.4%, investors are going to be tough to
attract. Remember, that’s operating margin. Net income is going to be
3% to 5%. Double tax-free municipal bonds are 5%. Why would an
investor put money into a company (where there is risk), when they could
put that money into low-risk munis and get the same or better return???
Further, why invest in a business like EDS at all when MS returns 41%
net income? This is why MS is a much more valuable company.”
[ via tim ]