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Technology Stocks : Aladdin Knowledge Systems (ALDN)
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To: IPOJunkie who wrote (258)5/29/1998 8:27:00 AM
From: Dr. J  Read Replies (1) of 351
 
Both companies sell "software security". The largest part of the business is "dongles" (the keys that fit onto your parallel port to stop you using software illegally). Rainbow is #1, Aladdin #2. Aladdin has been gaining market share from Rainbow. This business is growing at about the rate of the software industry (15%/year)

Both companies are trying to do other things to goose their returns. Rainbow has diversified into Internet encryption and software distribution. Aladdin is positioning itself slightly differently in "information security", but also has a license manager. They've also come out with a development environment for smart cards.

I've researched both companies, and concluded that Aladdin has a technology edge in dongles, and seems much more interested in being #1 in this market. Rainbow has lost interest in this market. I wouldn't buy Aladdin if it weren't for the smart card stuff which may provide an upside surprise.
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