Jay, you wrote "It is vital that the techno-heads contribute. Their work combined with the valuation work below make for a VERY informed board... "
In response to this, I believe the battle in this industry will be won by the companies who have the greatest number of developers and integrators recommending their products. The integration of computers and telephone equipment is not something that can simply be reduced to a pre-programmed chip (not for a REAL long time). Real time applications such as database access, intelligent call control & other "interactive" processes require programming, monitoring, and frequent updates.
Dialogic realized this several years ago, and made a huge investment in creating a proactive channel strategy that has paid off in a big way (not in their stock price yet). As a VAR which creates database applications which are accessible via phone, I can say without hestitation that the winners in this battle will be the ones with solid products, coupled with an aggressive channel strategy....one like DLGC has and its competitors are only now trying to duplicate.
It was Novell's channel strategy in the late 80's that propelled it to success. It was their subsequent lack of vision and channel strategy which unraveled them to the point that Microsoft was able to move in for the kill. The technical merits of the product were a given....they solved customer problems.
Unless DLGC screws up its strategy of aggressively recruiting VARS and churning out good products, it will continue to be a success. Their new mediastream architecture (DM3) has already been endorsed by several industry heavyweights including Fujitsu ( phone systems division), Rockwell, etc., etc. Further evidence of their technical prowess can be gleaned by looking at the fact that even their competitors are now making SCSA compatible boards and some, like Brooktrout, are marketing their boards as "Dialogic compatible".
A company like Motorola would have a tough time unseating DLGCs leadership, even though it does possess the technical sophistication to do so. The reason is that companies like Motorola have a very tough time creating and executing succesful channel strategies. It has been said over and over again that the merging of computers and telecommunications is complex and requires a very educated and technically sophisticated VAR channel. Based on my experience in this industry, coupled with what I read on an almost daily basis, I can comfortably say that DLGC (coupled with its partners), is one of the only companies with a channel technically competent enough to carry CTI to the next level.
As far as the stock price goes, I will leave that to the financial wizards, as its current price makes absolutely no sense to me at all. The anemic performance of the stock suggests that either the market is totally wrong, or we need a financial wizard in the company who understands that return to shareholders is just as important as first rate products and a first rate channel strategy.
I am not in the least bit concerned about the low end modem makers, the speech card companies, Intel, Motorola, etc., etc. The business DLGC is in is more more complicated than that. Lets just hope that if the financial side of the equation doesn't get its act together soon, that a larger company will fly in and buy the company. After all, technical merits aside, it is shareholder value we are all after, and that is not something we have seen for several years. Technical superiority, successful marketing, AND financial wizardry are all needed to produce returns to shareholders. DLGC has the tecnical superiority which cannot easily be duplicated, their marketing department is second to none, but their financial side leaves a little to be desired. In the end, all shareholders care about is earnings. If DLGC cannot produce the earnings, all of the technical merits of the company are meaningless. |
