Doc:
there are times when a new company can make it into a market place. Typically, those times are when a market is highly fragmented (i.e. many smaller companies, no clear leaders) or when existing companies fail to provide the offerings desired by customers. Those "lacking" offerings may be technical, marketing, service in nature. Sometimes there is a window if there is a paradigm shift (i.e. Netscape moving into Internet browsers, although that was a case of there begin no clear leader).
I think there is always room for a specialized niche player in any market. But, it is very difficult for an investor to get high end returns with a niche player in a situation such as we have in the help desk/Customer Info Mgmt. sector.
The market is not fragmented (limited # of well known players)
The market seems to be serviced well by the main players. Yes, I am sure each has a few features missing, but with the massive R&D investments being made, those gaps are generally closing. There is no fundamental paradigm shift in this market, and the existing companies have big sales and marketing organizations. There are no substantial distribution holes.
I use several application software industries as an example: i don't think it would be possible for a new player to make a play in the financials sector (Baan, SAP, Oracle are already leaders). PSFT is making a play, and they may make it, but they are coming from being a $400 MM company with a related installed base.
The odds of a new DBMS company successfully entering the market are slim - ORCL, SYBS, IFMX are already doing a pretty good job. As I said, there;s always room for improvement, but the massive infrastructure already in palce makes it difficult, particularly for a small company.
So, look...invest in that small company if you want...it's a free country and I know it's exciting. I really don't think it will be a threat to anything I'm investing in. Even if by some chance it were, it would be a long time away. But, these threads are for advice and comments, and my suggestion is that you'll make more money elsewhere.
I don't claim to be infallible and anything is possible, but the odds you are going up against are very strong. When a new company comes in successfully in a big way, it is because there is a big hole somewhere. And, I just don't see the big hole that will allow another VNTV/SCOP/RMDY/CLFY in the market. Please, if I'm missing it, educate me. If I'm wrong, blast me in public - I can take it!
OK, I'll try to promise to not say anymore on this specific topic. I wish you well, and if I'm wrong, let me know, so I can learn something.
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