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

To: Apollo who wrote (44810)	7/23/2001 10:30:29 AM
From: Judith Williams	Read Replies (2) \| Respond to of 54805

Apollo-- 10-fold increase in revenues over the next three years The 10-fold increase in revenues applies to Forrester Research's estimates for B2B commerce in general--from $604b in 2000 to $6.3 trillion by 2004. Within the product category we are seeing annual growth rates north of 100%--110% in 1999 ($975m) and 128% ($2.2b) in 2001. These last figures come from IDC and they have a skewed way of looking at the numbers which actually masks some of the growth. It was very hard to get a handle on the market and BEA's share. The numbers various research firms come up with are all over the map and the major players (BEA, IBM, ORCL, and SUNW) break out their revenue lines differently. The tipoff for the skewing--so far as IDC's numbers go--came in its conclusion that IBM was gaining share. This conclusion just didn't ring true since BEA's margins have been increasing along with its top line. do you own BEA? We neglected to disclose this in the report. Sorry. Don has invested and I have a small starter position. definitely believe it is a tornado space If it (and BEA) are not already in the tornado, they are so close as to make the difference academic. But this presented a problem in drawing a definitive conclusion about BEA's gorillahood--more for me than for Don, I might add. Normally with an enabling technology you would just buy the basket of contestants and winnow as the game played out. But BEA--as a stock rather than a company--is now valued at gorilla levels so the bet becomes a little more dicey. Here there are two concerns: 1. the control BEA exercises over its value chain It is not yet evident that this is up to gorilla power. Not all customers are exclusive. 2. the wild card of MSFT's .Net initiative Netscape was in a tornado and had a lock on a mass market and we all know what happened there. MSFT makes me nervous. On the other hand, BEA's management is totally focused and Coleman is superb not only in navigating treacherous waters bit in exploiting network effects. --Judith