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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Boplicity who wrote (30334)8/23/2000 12:13:53 PM
From: StockHawk   of 54805
 
>>Lehman note out this morning discussing Oracle's (ORCL) planned launch of a free, hosted version of its Sales Force Automation offering.<<

>>Will this stop SEBL in it's tracks. <<

My guess, no way. Certainly this is an interesting strategy that we are seeing more and more - can't beat the leader, relegated to a small share of a market that is not your primary one, then give your product away.

If we are talking about a simple whole product for a consumer (web browser)it can badly hurt the market leader. But in the case of a partial give-away of a product that will likely cost plenty to customize and support on an ongoing basis, I think the impact will be much less. It may even backfire. Selling to corporate clients, where performance is vital - perhaps some will reason that you get what you pay for.

Can you envision the meeting after something goes wrong and a manager has to stand up and say "yeah, but, I saved us some bucks - I got the software for free." As opposed to the meeting where something goes wrong with the SEBL product and the manager gets to say "Look, I bought us the market leader. The premier, most expensive product in its class. I'm sure the vendor will support us on this." Which manager would you want to be?

Let the market overreact for a day or two. Could be a good entry point.

StockHawk
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