
Autodesk’s John Walker Explained HP and IBM in 1991 - rbanffy
http://www.cringely.com/2015/06/03/autodesks-john-walker-explained-hp-and-ibm-in-1991/
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ableal
Walker's excerpts highlighting the impact of accounting rules are very much
worth reading.

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jobu
Accounting rules are crazy! Why isn't investing in other companies considered
a cost?

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mathattack
One way to view this is companies have 2 buckets to allocate costs to:

1 - Ongoing operations

2 - Investments

Investors care about margins (% of sales) on ongoing operations, but tend to
view investments with a "Return on Capital" (% of assets). Note that margins
are on flow, where as ROC is on a fixed asset. The idea is that if you know
the margin and growth of a business, you can come up with a long term value
estimate. (If you're interested, I can write more about how this calculation
works) It's also worth noting that this isn't the "optimal" way to make
spending decisions. Good companies know that it's worth treating all expenses
as a "Return on Capital" basis rather than purely optimizing on margins. (This
can be called EVA or Economic Value Added)

What the article captures is the essence of good leadership and management.
You can't be 100% long term - investors would never know if the money is being
well spent. You can't be 100% short term - you'll never invest for the future,
and will get crushed when the future arrives.

There is one caveat... If a company decides that it can no longer innovate,
then the "Stop spending money, and return money to sharedholders via buybacks
so that they can invest it elsewhere" actually does make sense. (Move capital
from IBM to companies who need it to grow)

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MrBuddyCasino
> You can't be 100% long term

Amazon?

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discodave
That only works as long as the founder or somebody equally powerful is in
charge. Everybody else is beholden to the board and thus the short-medium term
impact on the share price.

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MrBuddyCasino
True, but this doesn't invalidate my point. Its more of an argument that non-
public or founder-controlled companies enjoy a competitive advantage.

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mathattack
In some cases they can. It will be interesting to see how Dell plays out, even
if it's hard to generalize from just one data point.

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mathattack
The original note is outstanding.

[https://www.fourmilab.ch/autofile/www/chapter2_86.html](https://www.fourmilab.ch/autofile/www/chapter2_86.html)

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dworin
I love that he uses "Spacely's Sprockets' as his example customer. I used to
always use companies from cartoons in the case studies I made up for
trainings, but I reached a point a few years ago where the people in the
trainings had never heard of the companies I was using (Spacely's Sprockets,
Omni Consumer Products, Slate Construction Company).

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victorhooi
I get the other two (Jetsons and Robocop) (They predate me, but Google FTW!
Lol). but where does Slate Construction Company come from?

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qbrass
Probably Slate Rock and Gravel Company from The Flintstones.

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sown
So what companies are at risk of changed user expectations right now?

I wonder what tech we have now that is sort of experimental, unproven but
seriously at risk of being accepted: 3d printing, AR.

I'm not sure about these because while systems for these new tech exist, they
don't appear quite wildly popular just yet.

What do you all think?

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frik
3D monitor (autostereoscopy like Nintendo 3DS 2014 ed), augmented reality
(Google glass, MS Hololens, etc), virtual reality (Oculus, Samsung Gear,
etc.), virtual assistant (next-gen Siri/Cortana/Watson/etc.), 3D printing
(industrial precision, metal sinter technique), consumer cloud storage & sync,
drones, cashless life, etc.

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sriram_sun
I believe the tax burden on Autodesk would be x% of $125 as well instead of x%
of $500, actually saving more money for the company.

