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Technology Stocks : Vignette Corporation (VIGN)
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To: blankmind who wrote (509)11/12/2000 10:42:43 AM
From: MGV  Read Replies (2) of 628
 
Reinforcing the point about accelerating growth in higher margin (i.e. license) sales, VIGN has been developing stronger relationships with the biggest systems integrators (SI) - the Andersons, Price Waters..., and IBM Consultings of the world. These relationships are critical to their success in penetrating the enterprise market because the SIs are very influential in promoting and using software.

The higher growth in license revenue reflects VIGN's recent success in strengthening its relationship with SIs. It is enabling them to leverage their licensing model and it will lead to higher profitability sooner as their product mix skews away from servicing sales as a percentage of total revenue.

The strategy is to grab as much share as possible now. It is Oklahoma and whoever holds the most land when the market reaches the next stage in its cycle, wins.

My concern is centered on the length and size of the market opportunity. Will it be more like the ERP market or can they continue to extend the market in the manner that ORCL and SEBL have done?

I am not as concerned with the recent decline in share price. I think it is explained by non-fundamental issues. The tech bear market and management's ultra-conservative (I hope!) guidance for this Q, which put a lid on how far analysts increased numbers in their models, which stifled price targets, the holy grail of momentum players, and has produced mo selling.

Hey blankmind, your name doesn't seem to be accurate.
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