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Technology Stocks : NT Accounting Software (GPSI, PSQL, SOTA, TMBS) -- Ignore unavailable to you. Want to Upgrade?

To: michael_pdx who wrote (146)	1/2/2001 6:32:31 PM
From: Peter Dierks	Respond to of 149

After some consideration here is my assessment of the Microsoft purchase of Great Plains. They stated they believe the market is about five times what GPSI has been selling. GPSI has been growing at a rate of 40% to 70% per year. At a 70% growth rate it would take three years for GPSI to reach five times current revenue. At 40% growth rate it would take five years for GPSI to reach five times current revenue. Scenario one - MSFT plans to keep the current growth rates. This would entail adding new partners at roughly the recent rates, while increasingly penetrating foreign markets. No significant changes. Scenario two - MSFT plans to use their clout to give GPSI an advantage. Substantial additional partners will be added, this should upset many existing partners, whose areas are not guaranteed, but are the primary method of selling. This could more than double the business for a year or two. Any increase in the rate of growth overseas would be gravy (and most subject to MSFT assistance). Scenario three - MSFT sees Quickbooks growth and wants a piece of it. GPSI has been on an acquisition run - Realworld, Expertise, Apurtum, Solomon, as well as buying FRx, and a Fixed Asset module. MSFT could have GPSI spruce up and repackage one of the brands slated for discontinuation as a shrinkwraped package to compete on that level. This would put them in competition with SAGE (DAC / Peachtree / Best), CA (Businessworks / CA Simply Accounting / MYOB), and Quickbooks, as well as a host of others. An extension of this could be inclusion of a stripped down version in some high end Office product (such as: Office Professional Business Complete). They could base the entry level product on Access database instead of Btrieve. Do I believe that MSFT knows which scenario they will follow? NO! Whatever happens, I will be quite interested to see the outcome. There are some uncontrollable factors like how many GPSI employees leave; some may wish to jump to MSFT for the compensation; some may not wish to work for MSFT. Since GPSI has been closely allied with MSFT the number of customers bothered by this should be minimal. Presumably the same can be said about employees. The Fargo ND (GPSI's home) newspaper has published the opinion that this will be good for the economy. Peter