Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Seeker of Truth who wrote (47774)	10/11/2001 3:56:51 AM
From: stockman_scott	Respond to of 54805

Enterprises May Stumble on the Way To Going Mobile By Brian McDonough, Wireless.NewsFactor.com Wednesday October 10 06:55 PM EDT <<It sounds like taking an enterprise mobile opens a bigger can of worms than some might at first believe. Gartner (NYSE: IT) analysts said that by 2004, the proliferation of mobile options will force at least half of Fortune 2000 firms to support three distinct mobile systems. Companies will have to run three levels of wireless access, according to Gartner: low-speed wireless data only, voice plus Web access, and high-speed wireless LAN (local area network) access. Sounds like a lot of potential for implementations to get out of hand. Gartner advised companies to be "selectively aggressive" by limiting early wireless adoption to those technologies that directly support key business functions. No Gluttony for Wireless Unlike the frenzy seen in the early Internet boom, enterprises are showing remarkable self-control at the wireless technology buffet, often waiting for better networks or devices, higher adoption rates or a better business climate before making investments. But though companies may already have avoided that pitfall, Gartner also recommended that they maintain such discipline once they do roll out unwired services. "Enterprises should buy standardized devices for business users who can prove that they have a need, or provide an incentive program for employees to purchase all PDAs [personal digital assistants] and smartphones throughout the company," Gartner vice president and research director Ken Dulaney told Wireless NewsFactor. While it's good to encourage your staff to purchase their own devices, that practice raises security and integrity concerns, Dulaney said. "Unmanaged, untracked PDAs and phones must not synchronize with enterprise systems unless the user agrees to install and maintain enterprise-supplied security, backup and auditing tools." Tomorrow by the Numbers Gartner predicted that by 2002, 80 percent of mobile devices in the enterprise will contain at least 20 percent personally managed programs and data. By 2003, mobile workers will spend at least 20 minutes per day in a personal data synchronization process, which may be a red flag to enterprises to consider such productivity erosions against the gains expected from mobile deployments. "Key IS strategies for coping with this mobile device invasion will include constraining supported devices, adopting standardized synchronization tools and moving to higher-level application platforms that rely less on a specific operating system," Dulaney said. Faster Instant Gratification Looking ahead to 2004, the analyst firm said it foresees 60 percent of mobile workers compelled to carry technologies that offer instant response by voice and hourly response by e-mail. Whether that compulsion will be due to corporate mandates or real-world exigencies, Gartner did not make clear. The firm did predict an eventual convergence of voice mail and e-mail in which computer systems will determine which media and method will be faster and more convenient to deliver. "In many enterprises, the turnaround time of voice mail and e-mail are different," Dulaney said. "However, eventually they will converge to the point where users will have to respond in seconds, if they can." So, while tomorrow's enterprises will have to keep track of the demands of multiple systems, just think how the employees will feel.>>

To: Seeker of Truth who wrote (47774)	10/11/2001 10:56:26 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 54805

Malcolm - why subtract investment in plant, property and equipment (plus IP, knowhow and key technology)? Because you are measuring "economic profit". Which is the difference between what you get from outside the business minus what it actually cost you to generate and service this business. Maybe an example: I spend $5.00 on lemons on Friday. On the weekend my son appropriates some sugar and water and glassware and somehow manages to stop enough people on our quiet little street to capture $6.00 selling lemonade. From which I subtract my $5.00 as a hard lesson in business. He moans that he'll never save enough money for his Nintendo at the rate of $1.00 a week. So I spend $50 and we fill a few weeknights building a spiffy box stand with bright paint and a huge sign that all but pleads "please have pity on a young entrepreneur". The next weekend he does $20 of business on a cost of $12. That's more like it. Now he's figuring on his business yielding up a fancy new game in no time swift. Should I tell him about the cost in property plant and equipment? Or just wash it under the rug? In the real world this cost belongs somewhere. A company that rakes in profit without spending money on PP&E has got to be worth more than one equally profitable but with a higher appetite for capital. There is a technique used to model a business as though every expense is an investment with a particular rate of return. I think it goes by the name "EVA". Instead of attempting to forecast future revenues one assumes that Marketing gives an ROI of x; and R&D an ROI of y, and so on. Then capital in the the business cycle has its own rate of return; there's another for capital held in reserve, and so on. Theory goes one just looks at the spending and extrapolates the returns. I personally think that's much better than the simple "PE" ratio, if one is going to use ratios of things. And it's better for close in work than just extrapolating the ratios in 10-K's forwards. But it's not a good place to start. Neither are comparative ratios like PE unless one has a basis of comparison. IMHO, Focusing on economic profits is the most useful first pass valuation tool around. Kind of like what a T-square and table-saw are for wordworking. Followed closely by a drill press and router. Then maybe band saw and jointer and jig saw and lathe and thickness planer... Similarly, one still needs a selection of valuation tools... but for the Long Term investor starting somewhere I would think that the first rough cut is an estimate of economic profitability. After that one can get into market valuation, discounts and premiums, hype and sex appeal and so on... John.