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Strategies & Market Trends : Bowling Alleys and Tornadoes: G&K Hunting Grounds -- Ignore unavailable to you. Want to Upgrade?

To: HeyRainier who wrote (16)	7/14/1999 8:55:00 AM
From: Mike Buckley	Respond to of 153

Rainier, Also, it seems to make sense to me that better-capitalized competitors, coming from "the top down" have better success at market penetration, rather than from "the bottom up," such as in the manner Vantive approached SEBL's market. You're right, of course. But the reason the company has a larger market cap is because it also has hugely larger revenues. The sales growth came first and the market cap came afterward. Those who know the industry from the inside (a viewpoint of which I'm very jealous) generally say that Siebel's success is the result of a superior sales/marketing machine. Speaking of revenue growth, IDC says that in 1997 Siebel was the 24th largest cross-industry software apps company. In 1998 they were 8th largest. They are the fastest growing client-server applications company in the history of the business. --Mike Buckley

To: HeyRainier who wrote (16)	7/15/1999 11:00:00 PM
From: DownSouth	Respond to of 153

,i> Also, it seems to make sense to me that better-capitalized competitors, coming from "the top down" have better success at market penetration, rather than from "the bottom up," Ranier, actually that is almost never the case, as discussed in the most excellent book of 1997, "The Innovators' Dilemma". It goes against the better judgement of the dominant player in a product niche to market down, because, basically, to do so means lowering margins and producing product that the incumbent customers do not want. But it is natural for a competitor to explore up market, as their margins can improve and they have no customers in that market to advise them of what they perceive as desired in a new product, and they are willing to develop new markets for their innovations. The disk drive industry is a prime example of this dilemma in action. It's a long story, so read the book. It should be required reading for tech investors, imo.