BancBoston BULLISH BWEB & Infrastructure
INTERNET INFRASTRUCTURE
SOFTWARE COMPANIES
When the Tide of Internet Stock Prices Ebbs, What Should You Buy?
John F. Powers (415) 693-3314 john_powers@rsco.com
Anne L. Brody (415) 248-4737 anne_brody@rsco.com
July 29, 1999
Excerpts from Report:
Aggressive information delivery—due to the large volume of data
that we receive electronically on a daily basis, it will become more
essential for companies to prioritize the delivery of critical
information to employees. We believe that they will opt for push
technology, which broadcasts information across a network and
engages the attention of the employee. In our opinion, as the flow
of information across the Internet continues to accelerate, this will
quickly drive the need for push technology. Because this is a new
market and the range of applications for push technology is yet
uncharted, we find it is very difficult to project the projection market
size.
Internet infrastructure offers a lot of ideas for investment in rapidly
growing software companies that are facing very large opportunities.
As this space matures, the winners will become more clear; however, we
believe that it is possible to pick some of the most likely candidates now,
based on the criteria we've outlined above, the most important of which
are (1) new enabling functionality, (2) product ubiquity, (3) user
habituation to product, (4) early-mover advantage.
BWEB Excerpt:
BackWeb has established itself as an early leader in priority delivery of information over
networks. Users are receiving more e-mail than ever and there is a real need to prioritize important
information so that it is not lost in the crowd. BackWeb provides the mechanism for priority delivery
and has developed applications tailored to increase the productivity of sales departments as well as a
general platform for "pushing" information politely to users.
We believe that there is a large market opportunity for BackWeb. The company has developed a
Foundation suite of tools for polite push delivery and has a specialized Sales Accelerator application
that is built on this Foundation. We believe that BackWeb has the potential to create a polite push
platform which brings information to users rather than relying on users to find information.
ACTION NOW: We rate the shares of BackWeb Technologies, Inc. as a Buy.
The Company
Headquartered in Ramat Gan, Israel, and San Jose and founded in 1995, BackWeb has developed a
platform for priority information delivery over networks. Important messages can be hidden in the
flood of e-mail and electronic files that a typical user now receives. BackWeb offers a solution to
deliver important information so that it captures the user's attention. In addition to this general
platform, BackWeb has developed several applications on its platform to increase the productivity of
sales departments. These products are typically sold to senior management in a company because of
their measurable abilities to improve effectiveness.
Investment Thesis
We believe that as the amount of information computer users receive electronically continues to
increase, there will be a greater need for prioritization of business critical information. BackWeb
provides the technology to capture the attention of recipients through its polite push delivery system.
Investment Risks
Among the investment risks are (1) a new, rapidly changing market; (2) significant technological
advancement by competitors such as Marimba; (3) high customer concentration; (4) long and
unpredictable sales cycle; (5) the company's dependence on key personnel; and (6) political
instability in Israel. |
