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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (13801)	1/1/2000 9:27:00 PM
From: Thomas Mercer-Hursh	Read Replies (2) \| Respond to of 54805

does the company's weakness in the CRM and ERP markets dilute its appeal as the Gorilla in the HR automation market? This would seem, to me anyway, to be determined by the overall profile of PSFTs business. If their primary business focus remains HR and they are a gorilla there, then their weakness in other areas is of marginal relevance. If, however, they are spreading effort, revenue, and expense broadly across all areas, then I think Moore would say that they were not doing a good job of converting their gorilla dominance in HR into a broader base. While I can't claim to have looked as PSFT closely, this is my perception of the company. I.e., they established an early and very strong position in HR, but found, I would imagine, that the upside potential of revenue in that narrow a field was slowing and thus looked for other applications to broaden their revenue base. Thus, instead of finding ways to leverage HR itself, they re-defined themselves as the client-server financial application company, but by the time they got a reasonable suite of applications out for financials, they were no longer in a position to be a gorilla in that larger sphere and continuing to expand into manufacturing and CRM has not changed this. It doesn't seem likely at this point that they will establish an equivalently strong position to the one they once held in HR alone in any other definition of their market. I contrast this to MSFT and INTC, for example, who may not dominate in every single facet of every market in which they participate, but they certainly dominate in the area of their core business. If it turned out that 60-70% of PSFT revenue was still coming from HR, then I would say that they were misdirected in trying to go after all these other markets and they ought to forget that and focus on ways to leverage their dominance in HR. If the revenue from HR is more like 20%, then I would say that while they may exhibit gorilla like characteristics in the HR marketplace, i.e., from Moore's perspective with respect to market positioning and such, but that they wouldn't qualify as an overall company gorilla for the purpose of investing since only a minority of the company, i.e., the stock, was gorilla-like.

To: Mike Buckley who wrote (13801)	1/1/2000 10:06:00 PM
From: sand wedge	Read Replies (1) \| Respond to of 54805

Mike, Regarding PSFT and the HR marketplace, should the growth rate of the market factor into this? disclaimer: I would have looked this up in the manual but in addition to giving 5 copies of the book to various friends and family members for christmas, I loaned my personal copy to a golfing buddy this morning.

To: Mike Buckley who wrote (13801)	1/1/2000 10:29:00 PM
From: chaz	Respond to of 54805

Well, Mike, your comments, ummm opinions, establish it for me. Next question: Is HR a growth market of sufficient significance to hold anyone's attention? For me, it's just taking up space, and dragging down the index, even if I never buy a share.

To: Mike Buckley who wrote (13801)	1/2/2000 2:42:00 PM
From: Mike 2.0	Respond to of 54805

IMHO, PSFT qualifies as a "niche gorilla" within the HR automation space. Others have already posted, correctly IMO, that PSFT took too long developing decent financial/other modules. Even their company name says "niche gorilla." Of course as TFM says, app s/w gorillas have notably less gorilla power than an enabling technology gorilla. Even less power is afforded "niche gorillas". With that in mind PSFT investors surely must be aware that SAP et al have formidable HR modules of their own now, even Main Street payroll companies like ADP are stepping into PSFT's territory with products like HRizon. Finally, was it PSFT that completed a R&D division spinoff? Been long time since I looked at that but it never set well with me. Is it an arms length transaction or is it? Bottom line re PSFT, I do not see it as a viable "gorilla" play by any stretch.