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Technology Stocks : Computer Associates

CA 25.11

+0.1%

4:00 PM EST

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To: reba kenith who wrote (2658)	7/22/1998 12:18:00 PM
From: The Rancher	Read Replies (1) of 5232

business is flawed because of the mainframe site licensing model. typically, CA would sign customers up for a site license that lasted 5 years (+ or -depending on the particular contract). this was basically an "all you can eat" license for the data center. CA would book all of the revenue up front, which makes these site licenses big revenue generators for CA. what CA is now saying is that customers do not want the 5 yr. licenses, but rather 1 or 2 yr. this translates into significantly less revs per deal. also, companies are consolidating dispersed data centers into 1 central center. this leads to fewer deals and less revenues. these are fundamental flaws, not just asia or Y2K. also, i hear that the company guided all (or most of) the analysts cut rev. numbers across all pdt. lines, not just mainframe. sounds like something is severely wrong. i want to believe, but i'm finding it very difficult to convince myself to buy in now without knowing how long these issues will impact the company. -ranch on

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