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

To: Apollo who wrote (15912)	1/22/2000 9:24:00 AM
From: DownSouth	Read Replies (2) \| Respond to of 54805

Apollo, I know we went around about EXDS/Tornado/King last week, and I was persuaded by you that those labels fit. Here is why I will not buy EXDS: 1) the tornado is young and new, well-heeled contenders are jumping in. 2) the barriers to entry are basically financial. 3) the switching costs are small. 4) this is not a product game. This is a services game. I am not even sure that ggaming applies to services. In a nutshell, I believe you will do well with EXDS, but the risks in the medium term are very high. This king I would hold "slightly".

To: Apollo who wrote (15912)	1/22/2000 1:21:00 PM
From: dwayanu	Read Replies (1) \| Respond to of 54805

Apollo: [D]EXDS is a ... service provider, ... [A]Market Leader ... twice the market share ... most of the biggest customers, it is a King ... I would enjoy hearing why it isn't a king, or isn't in a tornado, using manual definitions of course. Of course <g> RFM p136 re overall services sector: there are no gorillas in this sector and ...at the end of the day, there is nothing in this sector that directly compares to gorilla power. ... There are no gorillas here. If the sector is denied participation in the Gorilla Game, are we allowed to define a player there as a King? EXDS appears to be a mix of the Professional Services and Transaction Services subsectors (RFM p137-141), much like the telcos AT&T (RFM p139), MCI, Global Crossing and Qwest, with the same capital, infrastructure buildout, competition, and commoditization concerns. Like the telcos, EXDS is selling a commodity with professional services around the edges to increase profit margin. If we declare EXDS a King-to-be, then we must also crown some of the above telcos <g>. RFM p152 Tornadoes occur when - and only when - a new value chain comes into existence. EXDS has a highly 'plain vanilla' web hosting business model. They sell space, hardware, and bandwidth to their tenants, and add services in order to make the whole thing profitable. There is no significant value chain built around EXDS' business, except in the trivial sense that EXDS is a distribution channel for Sun servers, Cisco routers, and telco bandwidth. Rather, EXDS is simply a new part of Sun/Cisco/telco's value chains. Hypergrowth market? OK. Tornado? Not in the RFM strict definition, though I suppose one could argue that the entire/overall Internet is a tornado market and that EXDS is a tiny piece of the AOL/Amazon/Yahoo value chain <VBG>. - Dway