The following is a post from the e-mail GG digest from Geoff Moore. I post it here because it addresses a couple of things in terms of the game. So much talk of using options, trading in and out, trying to boost returns and shooting for accelerated growth in wealth creation have been focal points of discussion. I'm not saying any of that is bad. I just found what Moore says to be of interest and focus to at least a portion of LTB&H GG's. The other item addressed is the move in the enterprise software category and how our view is in need of adjustment since edition one of the manual was published.
BB
>In that regard, two things that came up in some recent postings about gorillas not being slam dunks and SAP in particular over the past year and a half. First, remember that the gorilla game is a LONG term play for investors that do not trade frequently but who are building the family nest egg. In that context, an eighteen month haitus is not a serious issue
(whereas for an active investor it can seem like an eternity). Active investors, therefore, are seeking "gorilla game plus" advantages to exploit, and that is where a lot of the discussion on this site focuses.
Second, with respect to SAP, it was not their move to the NYSE but rather the Y2K impact on all enterprise application software vendors that caused their stock to tank in 1998. The question now, of course, for the entire category, is what will happen to ERP after the smoke clears. The conventional wisdom is that ERP (Enterprise Resource Planning) will have to migrate to IRP (analysts are forever busy making up new acronyms), in this case standing for Interprise Resource Planning, meaning coverage not just of internal processes but intercompany processes as well. This will inevitably lead to a collision between the old ERP (nternally focused systems) and the emerging CRM (Customer Relationship Management) vendors, of whom Seibel is the gorilla.
So the winning formula is projected to be ERP + CRM + Internet. It turns out that nobody has a lock on this formula as neither SAP nor Seibel is well architected for Internet deployment (that is, although they can force initial implementations in that direction, they should run into significant challenges in scaling them). So the whole enterprise application category has been destabilized. First dibs on restabilizing it goes to the gorillas, but they have to change in order to bring it off.
My view is that the category has to stabilize, in the sense that enterprises have to have applications, but how it will do so is outside the boundaries of my crystal ball.
Geoff
Geoffrey Moore
Chairman, The Chasm Group
(650) 312-1940
Venture Partner, Mohr Davidow Ventures
(650) 854-7236 |
