Hey Ramsey,
You took my words before I had a chance to speak. Now it looks like I am just following you. What the hell! I will post it any way.
I still have not listened to the quarterly CC. I will do a follow up post if I want to change or add anything.
Khan
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From the surface, the earning looked rather weak, and I don't like any kind of excuse for the earning short fall. Y2K, stock dilution, Legal services, or Oracle, these reasons are not good enough.
I2O growth is healthy from Intel. Since LSI is still paying the $3/4 million minimum, we don't know how fast it is really growing. I hope LSI' growth is tracking that of Intel, and I hope LSI to break the $3/4 million limit some time in the first half of this year. (Else, I would be disappointed.)
Unlike what Fidler has said, Linux is a real threat, and it is competing against VxWorks and pSOS. Look no further than TiVo as a proof. I don't know why no analyst stated this fact in the CC. Lynx has also been aggressively pushing Linux.
I like the move to support Linux over Tornado. This will kill the likes of Leneo. I am not so sure whether WRS' support of Linux is a true endorsement, but this move certainly gives WRS some control and influence over embedded Linux. WRS is probably hoping to make Linux a more direction-less OS in the embedded market, much like how Microsoft has "embraced" Java. This also gives WRS a better understanding of how Linux is effecting the embedded world.
I like the EST move a lot. It enables WRS to provide the total solution, which now includes hardware/software development platforms and hardware/software integration/consulting. This makes WRS a one stop shop for all embedded SOLUTIONS, something that no competitor can do.
I like the news of porting the WRS-GNU and ISI-Diab compilers to other platforms. This will no doubt set WRS to compete against the 4th largest company in embedded software -- Green Hill Software. As far as I know, GHS was preparing for an IPO; I think WRS has just made it worth some what less.
I like the road map of Tornado/Cirrus and Prism/Stratus into Cumulus in 2001. One OS and one platform is a must. WRS has a smooth migration path for both VxWorks and pSOS customers.
I like the new Legal Department. WRS has to protect its intellectual properties.
I like the announcement of a technological advancement in adding memory protection between tasks. This normally means sacrifices in speed, but WRS says that they can do it with minimal cost in performance. If this is true, this is a break through.
WRS is dividing the company into many pieces targeting specific markets. This is great. Embedded has a lot of divided markets. Being a very large software company, WIND can really concentrate in each market and knock out every competitor in each spaces, something that CE has barely started doing for the handheld computer market.
WRS' markets are set to EXPLODE. I don't know if it will happen this quarter, next quarter, or 2001. Pressure from within is building up. WIND is clearly a KING in this market. A 20 Price to Sales ratio seems reasonable to me, which places the company at roughly $140 a share. (But first, the company better show strong growth in earning.)
I will slowly add to my position. I don't think that there is any reason to hurry, because 1) I am bearish on the overall market, 2) with a weak earning, WIND is not going any where in the next couple of months, and 3) this is not a very trust worthy management; I have been burned by it last year. I still remember the day that I called Ron Ableman and Dick Kraber as liars a year ago. (I am sure that Joe Smith remembers this.)
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