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Technology Stocks : RATIONAL SOFTWARE- BUY OR HOLD -- Ignore unavailable to you. Want to Upgrade?

To: Hans-Erik Eriksson who wrote (3010)	1/9/2000 4:20:00 PM
From: ratlong	Read Replies (1) \| Respond to of 3115

How's it going, Hans? Couldn't agree more that they are executing the business opportunity we saw 2.5 years ago. Also couldn't be happier with the return we've seen. I don't know if I am on board with you on this new Internet company. I think, in this space, RATL is considered the most arrogant company around- not surprising given that this is how #1 is often viewed by others- except that RATL's arrogance seems to have really gotten bad. Since it is RATL against the world, I can't imagine that people are going to be particularly open to the idea of selling the software on the RATL spin-off portal. I know I've talked to some people and their responses have included "how about not in a million years..." My sense is that RATL is creating basically an ASP-model for software development products. Just like a company can lease Peoplesoft products from CORIO, eventually companies will be able to lease ROSE, ReqPro, Word, Excel and others. Great business model, tremendous hype surrounding the space, and if they are able to pull it off, the new company would see much stronger multiples than RATL currently gets (if they spin it correctly, the NewCo is a B2B marketplace for software products- could see similar valuations as CMDX, SQST, VERT and others). However, I highly doubt that MERQ, Compuware, CNSW, Merant, QSS, Sterling and others will really sell their products on a site that is 80% owned by Rational... The smart idea would be for some savvy entrepreneur to breakout immediately and build the same type of site for "all the others" and race RATL to the market- eventually forcing RATL to sell their products on your site because of traffic and flow! The key thing about portals and markets is that eyeshare and traffic drive results- and choices/comparison shopping is key. Since all of these companies integrate with each other to try to compete with the RATL suite approach, great upselling capability for an ASP business (also locked in probably 10 companies, which is alot more than CORIO!). Let RATL validate the model but then get all of the other vendors to be on your site. You doing anything these days??? :^)