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To: Bruce Brown who wrote (45785)	8/23/2001 6:52:38 AM
From: paul_philp	Respond to of 54805

Bruce, I may be wrong but I think of 'inventory buildup' and 'overcapacity' as identical to cyclical industries. The software industry does not have this type of supply-side issue. On the demand side the software industry is impacted by general economic conditions and the technology adoption life cycle. While the bubble inflated demand increased. While the bubble deflated demand decreased. This is my simplistic view of the world. Paul

To: Bruce Brown who wrote (45785)	8/25/2001 7:29:16 PM
From: Dinesh	Respond to of 54805

Bruce I'd venture to say that it is like food industry. By catering to a very diverse population it immunizes itself against sector slowdowns; it also lowers its growth rate at the same time. To wit, Microsoft. There are software businesses that cater to specific industries and suffer the ups and downs on that industry. In this regard, they are no different from the Applied Materials' of this world. Supply and Demand. It's very visible this time. This time we are being led down by the consumer, which is about 70-75% of the GDP. Reduced budgets will also affect the govt. which is another 15-20% of the GDP. regards -dinesh