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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Struggling Investor who wrote (1767)	4/20/2000 12:24:00 AM
From: Mark Madden	Read Replies (2) \| Respond to of 1989

IMHO investors evaluate companies like VRTS much differently than they evaluate companies like SEG. I do not know how to determine the value of VRTS but I think these are some of the investor considerations: 1. Growth - I heard part of the VRTS CC where they expected the growth to conservatively continue at 50%. They claim the market is there and they have new products to take new markets. 2. Scale - Software companies do not have the problems with growth that manufacturing companies have. They can easily double their revenues without building new factories or hiring and training skilled workers. All they have to do is increase their support and often they lag at that. 3. Exponential strength - The more dominant a software company is the more people will pay for the software. Since the capital cost of software is small in comparison to the operation and maintenance of the software, people want to own popular software. This way they are more sure the company will continue support and provide backward compatible upgrades. Trained people will be easier to find and the software is more likely to be compatible with that of other companies. Owning software from a company that goes under or is bought out is usually bad news. The software eventually becomes obsolete and the change to new software is very expensive in terms of data transfer, lost production and new training. A company like VRTS is attractive to some because of the high growth and good foothold in a fast growing market segment. Margins are loose and could get better as they expand into markets they can dominate. But if I owned some, I would immediately sell it. Regards, Mark