Here's some b2b excerpt interviews from Wall St Transcripts on our avorite picks, including sebl and arba:
1)ORACLE
Analyst sees Oracle as beneficiary of Internet infrastructure build-up
Melissa Eisenstat, CIBC World Markets Corporation.
MELISSA EISENSTAT is an Executive Director and Senior Software Analyst with CIBC World Markets Corporation.
TWST: Melissa, add your thoughts if you would. Also, as these customers focus on getting their computer systems integrated with the Internet, who has the products they want? Which are the companies that are going to benefit?
Ms. Eisenstat: First of all, I agree with Bob about it being sort of a distribution channel, one more way to get data to customers. But it's not the be-all and end-all; it's simply another distribution channel.
The second thing I would say is that the Internet has its negative factors, or it creates other issues for companies that use it that are sometimes kind of glossed over. I agree with Larry Ellison's vision of the Internet changing everything. But he also has a vision that little servers everywhere are bad and having a few big servers is better because it lowers the cost of administration for companies using such servers. I would just point out that it also creates some issues. If you are taking processing power and putting it back on the server, so that your employees or users of a system are using only a browser to access that application, you're putting a heck of a lot of pressure on that server. And that creates, actually, more need for enterprise software, which is positive, which goes into the second part of your question in terms of who benefits.
And certainly companies that sell software that creates that infrastructure tend to benefit royally. And I think Oracle is right up there, which is why I often love to talk about that, as well as companies that sell applications related to that, all the e-infrastructure or the Web-enabled application vendors.
2) SIEBEL
TWST: What factors are you looking at in evaluating companies and determining which of those you are recommending to your clients?
Mr. Dolan: The first factor is looking for a market opportunity that has real business drivers and compelling value propositions that will fuel a multibillion dollar opportunity capable of supporting the rapid growth of multiple players.
The other extremely important factor is the strength and proven background of the management team. Ultimately, in any of these high growth markets, it's management execution that ultimately makes the difference between who wins and who loses.
In the CRM space, Siebel Systems (Nasdaq:SEBL) has had by far the top management execution of any vendor. Today, they are the only vendor left standing today.
After management, I would say sales and marketing. Having a very good product allows you to get in the game and is probably 25% of the battle, but ultimately it's who has the best sales, marketing and distribution capabilities that ultimately wins. Included within that are partnerships that help to expand the distribution channel and increase the market awareness for a company.
TWST: Given the consolidation in this sector, which stocks are left for you to recommend?
Mr. Dolan: In the CRM space, Siebel Systems is my strong buy-rated stock.
SEIBEL AGAIN
ERIC B. UPIN is a Senior Research Analyst and Managing Director at BancBoston Robertson Stephens.
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TWST: Tell me a little bit about your sector please.
Mr. Upin: I cover an area that was formerly known as enterprise applications, which is now known as e-business software applications, and it really refers to business software. This area is distinguished from most other areas of technology because these products are essentially solutions to business problems. They perform functions or processes within a business, like automating a sales force, processing orders, delivering orders, analyzing data. And where these areas are particularly differentiated is the buyers are businesspeople; the drivers of demand are business issues. Companies need to be able to process more orders with fewer errors in less time with more flexibility. The real drivers are business issues and the buyers are businesspeople, and these applications are increasingly becoming strategic.
So when we look at companies, what it takes to win here is size, safety, market share, staying power and vision, and often those elements are very different from other areas of software, middleware, and systems management, where it may be the actual technology or the gadgetry associated with the product being the driver of success. These applications rarely go away, and as they become more strategic, companies are looking for strategic partners as their vendors.
TWST: Are these companies going to grow at the expense of, for example, classic contact management systems and client-server contact management systems?
Mr. Upin: Yes. I think there is a much bigger demand from the software than in the past. In the past contact management was focused on just making sure you had the right address information and that you would follow up when you promised. Now systems need to be much more robust in terms of group selling, supporting an indirect sales channel and understanding pipelines and doing pipeline management as the drive and need to make numbers become even more important for public companies. There's also a focus on much better and tighter response and delivery to customers. And even today some of the best known companies and best run companies still have a very limited understanding of their customers. So it's more than contact management; it is really understanding who the customers are, where they came from, and how to maximize the opportunity associated with that customer.
TWST: Are these companies doing a good job of keeping the systems simple? You talked about ease of use and avoiding large training programs and manuals.
Mr. Upin: I would say the answer is yes, but it's still early. We're still really in the first inning of the whole unfolding of this customer space. We believe the customer space alone will prove to be bigger than ERP, which all in all is greater than a $15 billion market, because this is more relevant to revenues and competitiveness. So the answer is we're several orders of magnitude better than where we've been before. With the Web interface, with the ability to deploy very quickly, we are now seeing companies get lots of users up and running very quickly. But at the same time, in terms of functionality, it's still very early in terms of what these systems will be over the next few years.
TWST: Response time for a user is enormously important for any kind of constantly used customer system - looking up something, getting data quickly. Are Web-based systems achieving response times that are equivalent to the client-server environment?
Mr. Upin: The answer, as usual, is yes and no. For smaller implementations the answer is yes, and for more focused implementations the answer is yes. A lot of response time now is a function of the pipe in terms of the communication speed and the availability of servers. In terms of software performance, response time can be very good if the underlying architecture supports it and is strong. So a lot of times it's not a software issue but a hardware issue.
One of the other problems that exists with Web computing is, if you really use a Web client at this point, then you don't have any software on your laptop and can't work when you're detached from the network. So until we really have high speed, reliable and affordable wireless Web clients, it is still going to be a mix of Web and client software on these laptops, because the technology is still evolving from that perspective.
TWST: Give me your favorites amongst this category, the companies you have the highest recommendations on.
Mr. Upin: We like Siebel Systems (Nasdaq:SEBL) for their size and market share dominance and momentum. Clearly they're winning the biggest deals with big companies, and they're the clear, hands-down, dominant player. We like Primus Knowledge (Nasdaq:PKSI) very much, because they're a derivative play essentially on e-commerce. And as more and more commerce occurs over the Web, and the ability occurs for even a small company to have a million orders via the Web in a month, and with a million orders there could easily be 20,000-50,000 support events, which a small company of 10 people certainly could not handle, there is going to be the need for the ability to have self-service electronic support, where customers can then solve their own problems. And Primus is really all about both Web support and making those "1-800" telephone operators a lot more productive and a lot more effective.
3) AGILE
TWST: You've talked a lot about the e-Process Revolution. What do you mean by that?
Mr. Moore: We see the Internet driving fundamental changes in the global corporate environment, and we believe that these changes are more than just automation. By leveraging the Internet, companies are creating hyper-efficient business processes, which is the reason that we have coined the phrase "e-Process." Furthermore, we use the term revolution because we're witnessing a sudden and radical change in how businesses operate that is driven largely by the ability to become more nimble, lean and efficient by using the Internet. The e-Process Revolution implies more than simply putting up a Web site and refers to all of the other things that can be accomplished with this technology.
TWST: To an outsider, this seems like a fragmented market with many different companies serving many different needs. Is this true?
Mr. Moore: Investors have to look at the size of the market that each one of these companies addresses. In the past, picking a company with neat technology but no apparent huge market has always been a recipe for disaster. We think that in some of these areas, like supply chain collaboration, indirect procurement, and direct procurement, there are huge potential markets, which is a significant factor that is the most attractive about this e-Process space.
Agile Software is another example. This company's solutions enable virtually integrated supply chains that create a much more cost-effective production and time to market scenario for companies like PairGain, which I mentioned earlier. Agile leverages the network effect and creates hubs that can eventually be the foundation for building procurement capabilities. In the electronics manufacturing arena alone, there are $600 billion of direct materials that are purchased annually, and this number is growing at 15% a year. Agile has a tremendous opportunity to enable purchasing of direct materials as well as deliver product content as the company moves further into verticals such as electronics manufacturing, medical devices and automotive |
