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Strategies & Market Trends : The New Economy and its Winners

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To: bob zagorin who wrote (25079)	8/4/2005 2:03:53 PM
From: Lizzie Tudor	Read Replies (1) of 57684

yeah, you are correct of course, just saying that 50mm revs isn't enough to be profitable is overly simplistic. You have some companies like AGIL who have a product that is not customized as much as others , so it is much more a "microsoft-like" shrinkwrap app, and R&D offshore in India. So they can make money on less revenue. But manu, i2 and PRGN are classic, highly cusomized enterprise and the problem with those is not only R&D- it is long sales cycles with support and no $$ in the sales process, and then an implementation phase that is costly and finally somewhere down the road you get your money. The truth is that high ASPs can fix the problem also, so if ASPs for manu raised to say, 300K- then they could manage profitability on lower revenue. But up until these i2 numbers we were getting 100K deal prices for everybody and that is too low. I2 says 200K deals are coming which is GREAT news finally. PRGN is in the hot services area so their ASPs will rise with everybody else. I don't think ARBAs asps will rise on their market, jmho.

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