Mike,
I am not trying to convince you, Mike. I never knew of BEA until about six weeks ago when it was discussed on the thread. From there, I found Matt Tomkins' piece in the World Ruler Newsletter and some of Paul Philp's remarks. This led me to research commentary on the boards and the white papers at BEA's Web site. I printed out about a 1000 pages and read them until they made some sense to me. I then listened repeatedly to what Coleman and others said when they presented the BEA story.
What I found not only interested me, but I smelled pongid odors. I knew that Judith had mentioned that she might try to do a Hunt report on BEA. At that time, I knew nothing about them other than they were associated with middleware. I asked Judith if she would like to do a report jointly. I thought and thought and wrote and wrote, and Judith said "too much, too much," etc., reigning me in to improve our joint product. What I posted is a version of what I had written on switching costs. I spent about 100-200 hours studying the company and writing about them.
I do not know everything about them or their competitors. It is not my responsibility to know everything or to continue to do the hard job of investigating them until everyone is satisfied. I see this as a community endeavor.
I agree completely with your point that it takes a detailed analysis to compare BEA's competitive advantages with each of its rivals' competitive advantages in order to determine how much addition or subtraction that makes in size of switching costs. I hope to learn all of that in time.
I made the point, which I borrowed from Varian and Shapiro, because I believed it was an additional analytic tool that I had not seen mentioned on the board and did not remember Moore saying this specifically.
I understand your Socratic style of learning about a stock. I believe that you make magnificent contributions to this community; you are an admired and trusted leader. And the question that you asked is right on target.
As for me, I am doing my best and hoped that by posting a Hunt report, with Judith, that we might spark a process. I believe that process is begun, and I appreciate your interest and desire to stimulate it.
Still, there are some things that I can do, but there are others here who can assess relative technological strengths and competitive advantages better than I can. Already, I have twice admitted that I have not studied BEA's competitors. So, I have no ready answer, and I am not willing to do all of the searching to satisfy everyone's critical comments, or, as in your case, their desire to learn more from someone who might know. I would be happy if someone else can do some of the heavy lifting. I did well to learn and understand as much as I do, but I recognize there is much more for me and all of us to learn about BEA or any other gorilla candidate. I will say that I believe BEA has a lock on its customers that creates giant switching costs, but others here may know better than I do just how complex the process of switching software operating systems is. I accept what Paul Philp says about BEA not necessarily being superior in each technology, believing that he has the expertise that I lack. So, whether or not additional switching costs are added because of the competitive advanatages in their products, such as their advanced clustering, business applications, or strong value chainof complementary business applicaitons, I believe that they reached the market on-time to gain some very significant customers and to create a significant value chain. Also, I believe that have achieved critical mass, which alone make switiching costs too high for any pragmatist majority to reverse their decision.. (Of course, I am becoming reluctant to say so because you may ask again, "what is the evidence for critical mass, etc.?")
My wife complains that I have already become too absorbed in this project. I have been up and working before five o'clock for two weeks.
What I may be willing to do is a more abstract piece on the gorilla game that talks about the process of faithfully translating its concepts, specifically the six criteria that we have been using, into the sets of observation required to use the model intelligently. I was considering that possibility before you asked your question that concretely pursues on element in that theme. That is, my strength is an understanding of how a model like the GG works, and how you can make it practically useful. I am a scholar, but I am not a technologist or financial analyst. I am still acquiring a great deal of information that I need to learn in order to make any contribution at all. I am still trying to learn myself, and I have learned a lot from you, just trying to give something back.
I hope this helps even if I did not have the solid answers to your work-demanding question.
Don
Don |
