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Technology Stocks : EXLN - Excelon
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To: Bob Trocchi who wrote (424)4/14/2000 9:25:00 PM
From: hasbeen101  Read Replies (2) of 811
 
Bob,

I think your analysis is quite good, especially with regard to margins.

In regard to this observation:

The marketing and sales costs are the ones that are a problem. I know that you need to build a sales force, I know that you need to increase marketing. This however is the area that will be the biggest problem to achieving sustained and growing profitability.

I think you have identified a major strategic issue. The one comment I would add is that I think the company could achieve better growth and better margins if it did a bit more marketing and less of the cash-burning labour-intensive sales. Specifically, marketing activities to software developers could include publishing articles in magazines, having a developer relations group, and having effective internet-based discussion groups. Companies like Rogue Wave and Installshield and (especially) Microsoft do this sort of thing. If the company can get developers building applications using its products, they can sell the deployment licences across the web for a tiny fraction of current sales costs.

Also, as I've mentioned before, I cannot understand the strategy behing making developer licences really expensive. Microsoft uses the opposite strategy, and I think everybody acknowledges that they know a few things about how to market software.
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