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Technology Stocks : Wind River going up, up, up!
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To: Allen Benn who wrote (1691)8/14/1997 1:12:00 AM
From: quelicious   of 10309
 
As we (not so) patiently await another quarterly earnings announcement and hopefully another sign that the future is now, I have a couple of questions:

1) In terms of booking development license (tech support, consulting) revenues, I know it is possible to manage earnings to a certain degree: A company has a direct sales force expertly managing client relationships so that deals will close when they should. But as WIND's royalty receipts (hopefully) begin to dwarf these revenues as a percentage of overall revenues (and even moreso as a percentage of income), how can WIND control the timing of this? I believe that this is the main reason why management has continually urged analysts to keep the I20 numbers out of their expectations. But wouldn't it be nice to know, at least internally, when these revenues (and respective cash flows) will be arriving? If management itself cannot depend on this cash, it seems as if an extraordinary amount of other cash must be on reserve. Is this the reason for WIND's such large cash position?

2) One of the best parts of the WIND story (not to discount any of the other parts) is the business model that includes royalties (read: free money) down the road. It is as if ORCL could charge companies that use their database and manufacturing applications for every product the client produces. Does anybody see a point where these types of deals will no longer be the norm? I am afraid it is too good to be true.

I am a long time reader and a first time poster. I read through Allen's asset allocation posts and realized that my 200% weight on WIND might be too excessive :)
Keep up the great posting, ladies and gents.
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