valuation, is there something magic about 1996 valuations? Who is to say there will not also be something magic about 1993 valuations? Or 1992?
Well, imo enterprise software, as a space didn't really start until 1996. It came into being along with the onset of client/server computing which relied on the availability of sql databases and unix (primarily) server architectures. 1994/95 was the big client/server rush for Oracle on the engine side, and then apps followed 2 years later. I was working in client/server enterprise apps in 95, but it was on installations in the bay area and the rest of the country hadn't adopted. This was a displacement technology to the prior architectures which were based on IBM mostly. Dun and Bradstreet had a package, ManMan was another one or companies just wrote order management themselves no matter how painful.
The difference (for me) between software and other techs is that the 96/97 valuations had nothing to do with the internet whatsoever, you could say it was a bubble I guess... a "clent/server" bubble. Unlike the internet vendors, software was profitable because the products they displaced from ibm were also very expensive. Then enterprise software took another hit in 99 (people don't remember this) when conventional wisdom was that ariba would kill the order management products (sap,orcl,psft), also the y2k buildup put a halt on new enterprise spending. This was truly hype, anyway psft,sebl etc stocks were depressed in 99 pretty severely, trading about where they are now.
Application servers like beas are new to the internet but they sell into the traditional base so I'm not sure where the bottom is on this stock.... whereas the others like psft I feel pretty comfortable the 99 lows are close to the bottom. But since the others are there (at those lows) now... I'd say beas is pretty close. Well, thats just mo, anyway.
Another thing to remember is for software the new internet architectures, which include an app server (although not necessarily beas) are in the initial adoption phases. These are psft 8, sebl 7, oracle 11i. I work with oracle and I know a bunch of companies are just putting 11i in now, even though its been GA for a year. The new implementations I know of are cisco, xlinx, amat and some others. So software has a compelling upgrade cycle right now unlike other tech areas like comm infrastructure where capacity is excessive. I noticed today sg cowen downgraded sebl and upgraded psft, also Tom made some bullish comments. So there is contradiction all over the sector. Imo there is no reason to upgrade one software stock and downgrade another, now. Consolidation has happened and these stocks are going to trade as a group.
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