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Technology Stocks : Seac - Seachange New IPO -- Ignore unavailable to you. Want to Upgrade?

To: zoe who wrote (280)	7/29/1999 3:18:00 PM
From: PeterBurgess	Respond to of 431

I found it quite startling that in the last quarter SEAC invested $0.31/share in R&D efforts ($4.274m/13.8m sh) while in the last reported qtr CCUR invested only $0.05/share in R&D ($2.371m/48.3m sh) My thoughts: 1. Seac is determined to be #1 in its video server businesses. 2. While Seac management currently sees a big payback from its R&D investements, management has the option of reducing its rate of R&D investments in the future with dramatic impact on the bottom line. This cash flow could be used for acquisitions, stock buy-back, marketting & sales, installation and service, cut-throat market share expansion, what-ever - the point is the $/share is BIG and FLEXIBLE. If you believe that Seac has strong management, then they have a big competitive edge in its video server businesses. 3. Its leading VOD competitor, CCUR, is not nearly as aggressive in its R&D investment. Some might suggest that it has underinvested in R&D-- maybe that's why it is trying to sell its RT business. The optimum business model will be obvious to all of us after VOD systems have been in production for 6-12 months - when all the pieces of technical designs are tested in the demanding real world. 4. In the ad insertion market Seachange does not have any significant competitors left standing to compare business models; In the Broadcast market the two largest competitors (HPW and TEK) are currently exitting, creating an extraordinary opportunity for Seac just as its product sales are accelerating; in the NVOD/PPV market I am not aware of any significant competitors today; in the VOD business, CCUR-Prasara is the closest competitor. Nobody knows the R&D$ breakdown for VOD in both camps. I'm not claiming that the $3+:$2 Seachange advantage in R&D funding as a whole extends to the VOD product segment today. We can all make our own guesses.