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Technology Stocks : Vantive Corporation

VNTV 77.60

+2.6%

Jan 12 4:00 PM EST

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To: Amsterdam who wrote (1588)	2/26/1998 2:12:00 AM
From: Clam Clam	Read Replies (2) of 3033

The Microsoft win is a big win for SEBL, no doubt. I think PSFT was once installed at Microsoft but I've heard PSFT was not unhappy about losing the business to SAP because they thought it was more trouble than it was worth. However, that is PSFT where they close the quarter a week early every quarter and still beat estimates by $.02 like clockwork, which is quite different than VNTV. Chuck Phillips has been concerned with who will replace EDS once they recognize all the EDS contract revenues. However, I have heard that the EDS biz is not going away any time soon and a new contract could be signed. This may not please Chuck enough to upgrade the stock but at least VNTV will likely continue to hit its numbers. The DSO's will likely continue to trend up and that may continue to hang over the negative sentiment in the non-SFA front office space. Siebel does have the mind-share. The SFA market seems to be on the move from bowling alley to the tornado stage where customer support is still clearly bowling alley given the lack of momentum at CLFY/SCOP. In a true tornado, more than one company should do OK, especially at this kind of revenue level. Luongo thinks SEBL's success is somewhat due to the lack of good competition in the SFA market where VNTV had to slug it out with credible competitors in the support market. This makes some sense. Anybody want to give some history to back before these companies went public? How did everybody seem to get the same idea at the same time in support while Tom was out on SFA on his own with dogs like Brock? Siebel seems more like i2 and MANU in that they make their pitch to the CEO/CFO, not the IT decision maker. The ERP's have done well at selling to the IT people and this might make VNTV's approach deficient relative to SEBL. SEBL will have the advantage of CEO references where VNTV might have to slug it out again, this time with the ERP's at the IT level. Nevertheless, VNTV is winning deals in direct competition with SEBL so this argument loses some of its luster. Vantive sure seems reasonably priced for an emerging 100% growing SFA business to complement its 40-50% non-SFA biz. However, I see no catalyst on the horizon (especially since investors could blow off another EPS upside quarter given the DSO situation). Chuck seems to be VNTV's only hope and it is hard to see him doing anything until April at the earliest (and maybe not even then).

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