Short of some day trader madness, I wouldn't expect any big solid upswings in PRGS until they can re-establish an upward trend in revenue. The last quarter looked good when compared with the prior year mostly because the prior year's second quarter was *really* bad, the downmost cust in their recent fortunes. This company has always had gold plated fiscal management and they are to be congratulated for making such a prompt and well proportioned response to a slip in revenues last year. This kind of good solid business sense does a lot to give one warm fuzzies.
The bigger question, though, is what they will do moving forward with their technology. There was a time when Progress was a standout industry leader in technology, but never was quite successful in getting their marketing message across. They stumbled badly in the transition to GUI, event-driven technology. While no one company has quite the same overall mix of products, they have consequently been hurt by others who have developed good technology for various aspects of what they do -- PB, VB, and Delphi for the client-side GUI, for example.
There is some recent indication of positive moves toward openness. The database has been given fresh priority and resources and it looks as if by this time next year will again be a good alternative to the major players, providing a high level of functionality at a better price point and with much simpler administration. This will certainly help our Progress VARS, which are the source of 2/3 of their revenue, in competing for larger sites. There are also some positive signs toward the use of Java and in opening up the overall architecture to industry standards like JSQL, IIOP, DCE, and the like. Again, this will help the Progress VAR solve critical problems including, at least in some cases, replacing the 4GL client with some of the better client-side tools. This is all good news for the Progress VAR since it allows the VAR to remain with Progress and to still produce a reasonably competitive offering. It remains to be seen just how large a re-development burden this will take.
The harder question, though, from a long term investment point of view, is whether this set of moves will result in a compelling story for new customers. I have long thought that they should freeze the existing 4GL and come up with a new OO4GL like Forte's TOOL, but if they rely on Java it seems like there is a real danger of them being taken for me too technology. Worse yet, people may find that making Java to Java comparisons will find that there are better solutions elsewhere. They certainly exist on the client side and developing frameworks may provide it on the distributed server side as well, especially since their current offerings for distributed deployment are far from industry leading.
This is not a company that is going to go away any time soon since they have a large VAR base, large installed customer base, and management that is very smart about adapting to changing financial realities. I would be surprised to see them make any big moves any time soon, but I think things look better now than they did six months ago for them eventually finding a path to real growth again. |
