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To: Bill Harmond who wrote (9098)	10/10/2001 2:11:11 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 57684

fwiw software news, vign, iwov etc. The bottom few paragraphs explain vign positioning vs. interwoven. Lizzie DATE: 10/09/2001 Interwoven's IBM Deal Fuels PR War With Vignette By Rik Turner The PR battle raging in recent months between Interwoven Inc and its archrival in the content management space, Vignette Corp, has been fuelled still further by last week's announcement from Interwoven of a deal with IBM Corp worth up to $15m. Interwoven told analysts of the deal in a conference call late on October 2, when CEO Martin Brauns put its value at the upper end of the $5m to $15m range, adding that, along with another large contract with an unnamed customer, the deal had been signed after the September 11 terrorist attacks. Not surprisingly, Sunnyvale, California-based Interwoven's stock rose from the doldrums in which most TMT shares are languishing the following day, rallying an initial 35%. The jump happened even though the company had warned of a fall in its top line for the third quarter and an operating loss of between 4 cents and 5 cents per share for the period. Software license revenue in isolation was also forecast to fall by a third to between $20m and $21m in the quarter. This provoked cries of foul play from Interwoven's Texan rival. Austin-based Vignette circulated, with undisguised glee, a Bloomberg article on the share price increase, inferring that the Californian company had been, if not fibbing, at least a little remiss in its phrasing. An analyst who preferred to remain unnamed anonymous observed that Brauns is "prone to being promotional" in his pronouncements, and said that what the Interwoven chief had "meant to say and didn't say effectively was that the $12m to $15m figure was over the lifetime of the customer, which could be 12, 18 or 24 months." For the fourth quarter alone, on the other hand, the revenue will be more like $5m to $6m. He added that, in the wake of the confusion, Interwoven had in fact called round the analysts with a clarification. The kerfuffle fed the existing PR war between the two companies, due to a great extent to the fact that, as the unnamed analyst put it, "Interwoven has been beating the pants off them in deals which were really Vignette's for the losing." He added, however, that in his opinion, Vignette's problems are primarily of its own making. "Vignette invented content management, but now they position themselves as a provider of an all-encompassing e business suite, with a lot of other things like an application server, the e-business applications, a personalization server, a cataloging package and an online marketplace," he explained. "Even Vignette's own sales people admit that, if you want a $250,000 content management suite, Vignette will come in an pitch you a $1m end-to-end solution, whereas Interwoven only do the content management bit." This more dedicated approach goes a long way to explaining why, despite having created the market space, Vignette now trails behind Interwoven, with a 17% share compared to the leader's 25%, according to Aberdeen Group statistics (CI No 4,200). Beyond the confusion regarding the timing of the revenue stream, last week's announcement underlined Interwoven's ever closer relationship with Big Blue. While IBM Global Services deploys a lot of content management packages, only Interwoven's TeamSite is actually resold along with Websphere.