Remedy Taking a hit why? Message Board

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Technology Stocks : Remedy Taking a hit why?

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To: Sudheer Kona who wrote (175)	4/18/1997 2:38:00 PM
From: Shege Dambanza	of 763

It is true there is seasonality in the form of a dip from Q4 to Q1. However, using the numbers you have given, it would appear that this year the Q4 to Q1 decline was 21%, last two years it was 14% each year, and 3 years ago it was 5%. In other words, the size of the decline has been increasing. No doubt there are good reasons for this, but it does not bode well. I don't have the time to crawl through the numbers, but I think it would be interesting to do the seasonality analysis on each of license revenues, and consulting revenues. I suspect you will find that the rate of growth of license revenues is decreasing, while consulting and maintenance revenues are increasing. To some extent this is to be expected with increased market penetration. The question is how much of the decline in license revenues is due to market penetration, and how much to competition? My experience in this industry tells me it is the latter. There are more entrants in the market segment that offer better and less expensive solutions. Rememdy's lack of an enterprise solution will haunt them. Thoughts, anyone?

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