Caveat issued in the Lazard Freres & Co. offer dated Sept. 24, 1997
Price at the time was 15 7/16--In discussing the technology under the section entitled Investment Considerations:
"BPCS uses a distinctly different approach to service-oriented application architectures. Its use of code generation from a specification language should result in better performance, but at the expense of up-front work in terms of specifying how modules interact and on what platforms they will run. In terms of its features and functions, we believe the set of ERP functions provided by SSA is quite complete. Indeed, the company is relying on its feature-function superiority to win deals over its primary competitors, including SAP, Baan and Oracle. BPCS 6.0 is year 2000- compliant, which is a distinct selling point for the product into a base of customers that are under tight deadlines to replace in less than eight months, as opposed to SAP's , which has a track record of installation times of up to three years. However, SSAX is suffering from customer dissatisfaction issues relating to its older products that were, until recently, non-Year 2000- compliant. This could result in more-difficult reselling into SSAX's installed base.
"Overall, SSAX's BPCS 6.0 is attractive due to its features and functions, as well as its rapid installation time. We identify several concerns about SSAX's approach to delivering this technology, including trading off industry standards for performance. However, SSAX has projects underway to address these issues, and we are satisfied that SSAX has the vision that, along with the resources that the convertible offering will provide, should enable the company to deliver ERP solutions that satisfy our criteria within 36 months. This conclusion is based on SSAX's technology strategy, not its marketing, sales, or senior management capabilities, nor on its abilities in the next two years to increase its market share based on existing systems that are not based on industry standards. Nevertheless, its current momentum should be sufficient to carry the company into the next generation of products."
Well--thought I should present this even though it is four months old--The key is that both H&Q and Larzard are not expecting any increase in market share until the program meets broader industry standards--but the market is growing at 30-35% per year. Both companies key in on improving management, sales and marketing--both see a return to profitability--Despite the negative comments LF expects the stock to be above $20 within three years with the convertible trading at near $130--think you can buy the convertible in the mid 80's but haven't checked recently. Just thought we should keep our feet on the ground. |
