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Technology Stocks : Siebel Systems (SEBL) - strong buy? -- Ignore unavailable to you. Want to Upgrade?

To: swig who wrote (3445)	3/31/2000 2:41:00 AM
From: Mike Buckley	Read Replies (2) \| Respond to of 6974

The market for CRM software ... is expected by the International Data Corporation (IDC) to grow from $1.68 billion in 1999 to more than $13 billion in 2003, a compounded annual growth rate (CAGR) of 97%. That annual growth rate is very misleading. AMR Research provided actual revenue in 1998, not estimated revenue, of $2.3 billion and actual revenue of $1.2 billion in 1997. As a result of using such a relativey low figure of $1.68 billion in 1999, IDC's estimated growth is skewed. That probably explains why this is the first time I've seen a growth estimate beyond the typical range of 40% - 60%. On the other hand, IDC's total estimated revenue of $13 billion in 2003 is roughly in line with AMR's estimate of $16.8 billion, at least closer by order of magnitude than the reported "actuals." The research firms report widely varying numbers. As an example, IDC sez 1998 SFA revenue was $888 million and Frost & Sullivan sez it was only $468 million, nearly 50% less. And upon close inspection you'll find that some of the research companies contradict themselves. If we assume that the CRM market grew just 40% from 1998 to IDC's number of $1.68 billion in 1999, we can deduce that IDC sez 1998 CRM revenue was $1.2 billion. Using that information, IDC is saying that SFA was about 75% of the total market ($888 million.) I think part of the confusion is caused by authors using numbers reported by resarch firms that might not be clear about whether the revenue refers strictly to software sales or whether it includes services revenue. Regardless of the reason, the numbers being reported in articles and press releases are far from consistent. They are inconsistent enough that I wouldn't bank on the 100% growth implied in the report by Frankenoff for Individual Investor. --Mike Buckley