FirstWave Technologies (FSTW) Message Board

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Technology Stocks : FirstWave Technologies (FSTW)

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To: Bob Trocchi who wrote (7317)	12/27/2002 2:32:45 PM
From: TEDennis	Read Replies (1) of 9677

Bob: re: services vs software Everything is relative. Software has a relatively fixed overhead once R&D is complete (yeah right ... like R&D is ever complete!). ROI doesn't happen until after all those initial startup and ongoing maintenance activities are covered. Then it's clear profitable sailing. Consulting Services, on the other hand, has a variable ROI from the get-go depending on the involved person's pay scale. Techie resources are "rented out" to customers for anywhere from $1,000 per day to $2,000 per day (and up), depending on their specific expertise and various other factors. That's far more than than their cost to the vendor. Otherwise, the vendor wouldn't send them out to clients, or eat their "bench time". So, I guess it all boils down to what the definition of "high-margin" is. To me, Consulting Services is high margin compared to other people-oriented activities. If it weren't for "high-margin" technical services, there would be a lot fewer software companies around. The point I was making is that one of FSTW's profit margins will be squeezed by the fact that they will have to share the spoils with EL. Thus, lower profits to FSTW's bottom line. Regards, TED

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