Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Citrix Systems (CTXS) -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (6878)	8/11/1999 1:43:00 PM
From: David Montgomery	Respond to of 9068

The only question is: what will be their scope of supply. They can provide the framework and / or the applications to the ASP's. From the recent acquisitions, it appears that they want to provide both. dm

To: Chuzzlewit who wrote (6878)	8/11/1999 3:39:00 PM
From: David Perfette	Read Replies (3) \| Respond to of 9068

In various articles appearing over the last couple of months, management indicated that CTXS would not become an ASP, but would focus on being an enabler of ASPs. TTFN, CTC IMHO, I don't see a whole lot of positives with them becoming an actual asp. First off, by doing so they would be competing with thier potential customers. Secondly, from what I've read about the ASP business, there seems to be a very high start up cost as well as a very long period of negative cash flow. If so, it certainly would be a big drag on earnings. There was a good article in the Street.com yesterday discussing ASP's: thestreet.com Here's a piece from it. "Conceptually, it could be the next big thing, but what worries me most is the business model," says Michael Hahn, a fund manager at Merrill Lynch. ASPs have extremely high start-up costs in setting up data centers, and they have to pay for software licenses up-front but can only recognize revenue over time. Take Annapolis, Md.-based USinternetworking as a case study. Hahn, who owns some shares of it in his personal portfolio, notes that the company's cash flows continue to fall deeper into negative territory. USinternetworking lost $23.6 million, or 66 cents per share for the second-quarter earnings, although revenue rose 52% from the first quarter to $6.7 million. Cash flow or earnings before interest, taxes, depreciation and amortization were a negative $15.4 million. -David P.