Clearly SYSF's last quarter was disastrous. Yet, as investors looking for future performance lets take a dispassionate view:
NEGATIVE:
-OEM strategy - by definition creates volatility
-Must rebuild the sales force
-Poor forecasting by OEMs increases risk
-Asia remains problematic market
-Marketing, product awareness suffers
POSITIVE:
-SystemWizard is phenomenal product; engineering intact
-New CEO has strong background, motivation to succeed
-Underlying need for SystemWizard-type products grows rapidly
-Contacts, initial sales to leading OEMs already done
-Finances (cash, DSO, etc.) are in reasonable, if not good, shape
My conclusion - future risk is high, but not surprisingly so is potential return. Each investor has their own motivations, but I am willing to live through the volatility, so as not to miss the upside. The sooner the better, but the upside needn't happen in the next quarter or two.
Great products don't always prevail (Mac, OS/2, etc.), but they are one of the top 3 things I look for. The other two? Good management and good marketing. I have high hopes for the new management. Its the marketing part I find scary. SYSF needs to undertake a much better job of evangelizing problem-resolution software - not only throughout the OEM organization, but with the industry analysts, distribution channels, persuasive Fortune 500 customers and eventually the mass market user. |
