Good job getting back to even, Thomas. I suspect there are several FSTW shareholders who weren't able to achieve that.
On another note ....
Note these statements from the Q3 report:
Year-to-date total revenues for 2002 increased 91% to $10,798,000 from $5,646,000 for the first
nine months of 2001. Software license revenues of $1,784,000 for the first nine months of 2002
increased 126% from $790,000 reported for the first nine months of 2001. Year-to-date services
revenues increased 181% to $7,740,000 in 2002 from $2,755,000 in 2001.
A 126% increase in license revenues caused services revenue to increase at that same rate, PLUS 50% !!
Cool beans! The secret to success is sell a bunch of new customers, and have big services contracts for customization.
However ...
Theoretically, the new .NET version of the product will be slicker and quicker, with an easier installation and implementation path (otherwise, why build it?).
So, the need for installation and customization services should decrease, assuming the same number of new customers. That means services revenues should decrease. Unfortunately, services is a high markup item. Not just for FSTW, but for all software vendors. Service is the name of the game.
Conceivably, the software revenues could increase, and the services revenue could decrease. Bummer.
Not only that, but the Extreme Logic alliance provides EL trained personnel to help with installs of the new product. That's probably going to be a necessity for a while until the FSTW staff comes up to speed on it.
Unfortunately, EL's not going to provide those services for free. They'll be the ones getting the high markup. FSTW will get the services revenue, but will have to pay EL as a sub-contractor. Which means FSTW's service revenue margins will go down.
Can't win for losing, eh?
Regards,
TED |
