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Technology Stocks : Software.com, Inc. (SWCM) -- Ignore unavailable to you. Want to Upgrade?

To: Mark Oliver who wrote (63)	9/15/1999 3:43:00 AM
From: Rupert	Read Replies (2) \| Respond to of 142

Here's some of my own untutored thoughts and hype on SWCM as an amatuer's follow up to the BBRS report. I believe that SWCM is an undervalued Internet infrastructure stock that has been largely overlooked: 1) Because the press is more attracted to the trendy hosted/managed e-mail services business model, even though the combined number of hosted e-mail accounts from the major players (CPTH, MAIL, etc) doesn't come close to the number of licensed accounts SWCM has (47 million) and some of the companies active in the hosted area use SWCM's software (like USA.net) 2) Because SWCM is a software company and not a provider of hardware (wires 'n' switches tend to give you instant multi-billion market caps these days). Plus, software company stox haven't done as well as service company or Internet company stox over the last two years. However, unlike so many of the companies that have IPOed this year, this is a real business. These guys waited for a couple of years before their IPO so they could do it right. Competition: The figure of 60% is often quoted as SWCM's market share. Not bad. Probably the only IPO this year with a 60% market share. Not many IPOs this year can boast even a 10% market share. Microsoft isn't a player in this service provider level messaging market cos they are more interested in the enterprise/corporate market which is vital to them. Netscape's solution is unpopular with IT professionals and Netscape itself is in technical and marketing disarray after the AOL takeover. Many ISPs would probably not be too happy about buying a messaging solution from a company that is owned by one of their archrivals (AOL), and the Netscape/Sun relationship doesn't have a clear marketing message and is not platform independent. Plus, we are about to see a huge increase in the size of the messaging market as a new range of portable communications devices are becoming available that will extend and deepen this market. The popular instant messaging is another area that I think will broaden the market, as it can support a whole new raft of instant applications that are probably being hacked on in all night sessions all over Silicon Valley as I am writing this. Market: There are some big elephants out there waiting to be bagged and plenty of smaller ones too. Many of SWCM's customers are companies for whom signing up new users is a number one priority, and each time they sign up new users this benefits SWCM's bottom line because the ISP will come back to SWCM for another block of e-mail account licenses. Every time @Home runs an ad on local TV and signs up more users.... And remember that e-mail and messaging is mission critical to an ISP or web portal. If it sucks, they suck. So they are willing to pay top rates for the best products and services. As for the hosted e-mail services, I love them if they are based on SWCM's InterMail. However, I don't think that many ISPs, telecomm companies or web portals (the businesses that make up SWCM's customer base) are going to house their mission critical e-mail with a third party. Better to manage it yourself (using SWCM's products). I mean, if you are a telecomm company and you can't manage messaging, there is something wrong with you. Europe: SWCM has offices in the UK, Germany, France and Italy, although it doesn't seem to have a European HQ yet like most other US software companies end up building. The European market is very hot at the moment but SWCM's customer list in that area is currently fairly small, so I'm expecting more stock-movin' customer acquisitions and expansions over there, especially now that the summer lull (and those long European vacations) are over. In countries like the UK, France and in the Scandinavian countries, the Internet is taking off and a new breed of low cost aggressive service providers are being extremely successful in demolishing the net access monopolies of unpopular slow moving telecomm bureaucracies like British Telecom (yes I'm a Brit) who were unprepared for the demand and unwilling to satisfy it. For example, Richard Branson's Virgin Net, already a SWCM customer, is very successful in the UK..and all those new users will result in more e-mail accounts. Internet service is basically being given away in many European markets..and again, all those newbies are going to want 3 or 4 e-mail accounts each, and one for each of their pets. Europe has a very high acceptance of mobile phones (Vodaphone in the UK, etc) - many cellular services now automatically roam Europe-wide which is actually more than you can say for the US in many cases - and a natural extension of mobile phones is to provide messaging access in cellular handsets. Asia: SWCM has offices in Japan, Singapore and Hong Kong. I think you can basically ditto what I have for Europe, but the Net has lower penetration rates for various reasons. But if you have any doubts about the rapid growth of the Asian Net and cellular markets, just check out AsizBizTech.com every day or so: nikkeibp.asiabiztech.com Just some ramblings. (I own SWCM at $23)