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Technology Stocks : PairGain Technologies

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To: JAMES E. MICHELS who wrote (19706)1/30/1998 3:10:00 AM
From: Henk Kruisbrink  Read Replies (2) of 36349
 
<even-a Grant Dove-who is reported to be on their Board and on the
Board of USWEST>
I'am reading between the lines that the Netspeed <-> USwest deal
is a favour deal. Mostly those deals don't last very long.
Let's analyse the deal:

1. Netspeed, a startup company get a huge mega deal (compared to
Netspeed's size, I'm guessing that they're small) to install a
huge amount of equipment troughout the area where USwest is
operating.
2. They had a good story according to the USwest reply we got.
3. Does Netspeed have the manpower to deliver the goods?
4. Does Netspeed have the logistics for a deal this size?
5. Was the deal closed between buddies (Grand Dove and his USwest
counterpart)?

My 2 Dutch guilders analysis:

1. There is a good change that the deal is too big for Netspeed,
and that it will take them down the drain.
2. I was once in sales support and we got a big deal because we
had a good story, beating our biggest competitor. (this was
before I worked with 3Com), but after installation we didn't
sell much to them. This means that USwest gave the deal to
Netspeed based on a good story, and not to a company that has
a solid reputation.
3. Startups generally don't have the manpower to do huge deals,
and are reluctant to hire new personel for just one deal.
The result will be overstressed employee's, who will leave
very soon, not good for the business.
4. I checked their website again, and I can't find any info on
other office's than their HQ. This mean that they have no
logistics in place, nor any info on training facilities for
customers (USwest) engineers.
5. After the analysis of the above 4 items, I have the feeling
that this is a oneoff deal from the "good old boys network"

HK
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