>>You might want to compare PEGA's accounting policy and number of new client announcements to Siebel systems to get a comparative valuation. Siebel has many more customers or trial customers in a much wider variety of industries than PEGA.
I have. I only have one position in my portfolio bigger than my positions in Pegasystems and Siebel. I like them both very much. Correct me if I'm wrong about this, but as far as I can see Siebel and Pegasystems are the only players in the CIM space whose license-growth is accelerating this year.
Pegasystems services the financial-service industry, the most IT-intensive non-technology industry there is. There are plenty of prospects for Pegasystems, and they are huge businesses with the biggest customer bases of any industry. Add likely expansion into the RBOC's and were dealing with universal customer counts.
The platform coverage and scalability of Pegasystems software is unrivaled. It's essentially different stuff. The Sears contract, for example, deals 40 million accounts and $20 billion in receivables. The Sears account-maintenance department alone has nine call centers, representing over 700 agent workstations. That total doesn't encompass other departments included in the roll-out with their own call centers, such as telemarketing, collections, new accounts, detailed lookup, or bankrupcy.
We both can jump through hoops debating the merits or disadvantages of Pegasystems lease-based model, but I don't think it's an issue. A different and more important point to me is that Pegasystems initial revenue recognition lags contract-signings by about 6 months. Look at their sales commissions (which don't lag) paid during Q2, and you get a pretty clear view of what's really happening on the sales front. That's the principal reason, IMO, that Pegasystems enjoys its relative valuation.
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