Is the government really a potential customer?
I am short on this stock; let me get that out of the way first.
I'm following this thread with great interest and learning a lot, however,
I have some questions about a comment I have seen several times, i.e., that
the federal government is likely to be a large customer of year 2K products and ,
if so, DDIM may well profit from this development.
Right now, I am at work and do not have DDIM's investor package or the
very recent 10K in front of me. I do recall though, that in those materials
DDIM management indicated that they were focusing their year 2K marketing
efforts on a limited number of industries. Among these target industries
were health, financial, insurance and I think one or two others. I am certain
that the government and any federal agencies were not listed as part of
their target industries.
If it is true that DDIM is concentrating their year 2K solutions on certain
industries (IMO they should) isn't it unrealistic to talk about revenue expectations
from industries outside of their target group. True, they could luck into
some revenues outside their group, or their licensee's could sell some
product to other industry groups but is this to be 'counted on' with any
degree of confidence. I understand this is a debatable issue and I would
like to hear contrary views.
On another note, everytime I look at the Year 2K website, I see news
announcements of other firms developing Y2K software that is touted as
reducing Y2K fix costs by 90% or some other extravigant claim. DDIM admits in their very
recent 10K that other than 'technical expertise' there are virtually no
barriers to others competitively entering the marketplace. They admit
that some of their existing competitors (Computer Horizons is mentioned by
name) are more established and enjoy greater economies of scale. They
admit that someone else may come along with a better more marketable
product. Finally, they admit that it will be difficult to protect their
intellectual property from 'copy-cat' type infringments.
These are some of the reasons I am currently short but as I have proven to myself
on more than one occassion, "I could be wrong". |
