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

To: tinkershaw who wrote (40551)	3/18/2001 3:31:05 AM
From: Seeker of Truth	Read Replies (1) \| Respond to of 54805

Tinker, I am deeply indebted to you and I'm sure many of the people who read this thread are deeply indebted to you for your detailed discussion of BEAS. Thanks to your discussion, I'm starting to get it. I'm a fan of integration. There is a kind of evolution of intelligence from data---> information---> cross-connection of information from many sources. As we get a more telescopic view of information from everywhere we are more intelligent. Ellison also has the idea of integrating everything but it looks like he doesn't get or keep the good programmers to realize his ideas. IF BEAS really makes it easy to build integrating programs then they are onto something stupendous, IMHO. By the way, my P/E was based on the nearest quarter, not on a projection for 2001, hence our difference. I'm sorry that I did not make it clear that my question "aren't their other guys who program in Java" was a rhetorical one. In his talk, the head guy at BEAS seemed to be making a big deal out of Java vs. other languages so I was addressing that. He did say that he could have reported substantially higher earnings. I'm not sure why the revenue was deferred, unless it is that he is owed the cash but has not actually received it yet. If that is the case then he is vastly more honest than the heads of most of the companies of which you can buy shares, and my hat's off to him.(I don't wear a hat, but the 19'th century phrase will do.) I wonder where you obtained the figure of 200 million in deferred revenues. I didn't see it in the Yahoo writeup. I got an ROE by simply dividing Yahoo's reported profits by the equity of the company. I don't know the difference between equity, which is book value, and invested capital. If by invested capital one means the total capital employed in the business, whether it is borrowed or owned, then the return on invested capital should be still less than return on equity. To obtain the profit margin I divided profits by revenues. I realize that this is not the operating profit margin but it is a good metric and it still looks mighty slim. Or course if we include the deferred revenue it improves. My take is that a strong team of good programmers at some place like MSFT or IBM where there is lots of cash and therefore some managerial patience could duplicate what BEAS has done. But the interface would be different and I suppose that the people who are building on BEAS's integrating foundation won't want to switch. In other words they may be too late. OS2 kind of situation. The good replacement can be too late. The goal here is so glorious, enabling the integration of front , back, legacy etc., that it seems strange that a small company can get a stranglehold on it. In this market they are practically giving away SEBL and NTAP so I'd like to wait for some further price drop in BEAS. However your discussion does make it seem like, at the least, a worthy gorilla CANDIDATE. Thank you, indeed.

To: tinkershaw who wrote (40551)	3/18/2001 2:20:59 PM
From: Thomas Mercer-Hursh	Respond to of 54805

One small point: J2EE is popular because of its universiality and interoperability. One of the things that makes me a bit nervous about Java-based products at this point is that I am looking at them from the perspective of Forte's TOOL product and ADE. Forte already was some years ago what it is that Java is trying to become, i.e., a suitable tool for developing enterprise class, scalable, distributed applications. J2EE is certainly a large step over what came before, large enough that we are still only getting to full implementations of all of what J2EE has to offer. But, from the perspective of those who already have a tool for building these applications, J2EE is really just a start. J2EE.next is closer. But, it is likely that it will be the standard that follows that one, J2EE.next.next, if you will, which will bring it more or less to functional parity with the current TOOL product. J2EE.next is still a standard under discussion at a fairly early stage. J2EE.next.next doesn't even have a name yet. The implication is that people who are building products which require this functionality today are doing so with a combination of compromise and workarounds. The implication is compromise in the product and growing pains adapting to the future standard. To be sure, this is nothing new in the computer biz, but it does us well to remember that J2EE is not the be-all and end-all.