Chuzzlewit,
You're right that I got confused. I thought you were referring to Citrix. I'll try to pay more attention. :)
I think that SEBL's potential market (given its current business) is much more constrained than CTXS, and for that reason it is easier to make a price does matter argument for SEBL.
For me, the reason it's easier to make a price-does-matter argument for Siebel is that it makes an applications product instead of an enabling product. As such, Siebel lacks the control over competitors that Citrix can muster.
Setting that aside, the potential markets of the two companies are monstrous. Citrix's potential market is every single desk-top appliance and many hand-held appliances. I don't have a calculator that counts that high.
Siebel's market, prior to all the excitement about e-commerce, has been expected to be larger than the ERP market. With the added umph from e-commerce, it should become a lot larger than ERP.
To use some very round numbers, let's place Siebel's current market share at 20% of the CRM market. Over the next four years, assume that market share increases to 25%. That puts their sales at roughly $4 billion. At a PSR of 10, the market cap will be $40 billion, three times what it is today. That's an average annual increase of a little more than 30% even from the current lofty price resulting from this year's 250% increase. Massage the numbers to suit your fancy. :)
--Mike Buckley |
