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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: XBrit who wrote (14500)	10/23/2002 11:27:57 PM
From: Bill Harmond	Read Replies (1) \| Respond to of 57684

nytimes.com

To: XBrit who wrote (14500)	10/24/2002 1:53:27 PM
From: Lizzie Tudor	Respond to of 57684

OK just this one small reply on this. There are probably less than 10 surviving top tier enterprise software players- these likely include sap,orcl,psft,sebl,vrts,maybe beas, a few others. Current software growth rates are nonexistant even for these remaining players. There are almost no licenses. Taking psft as an example his current P/S is less than 2. Between 92-97 it averaged around 8. There was no bubble then (94 was something of a bear, in fact), just a paradigm shift to packaged enterprise apps. I don't believe the current scenario of zero license revenue growth is sustainable, additionally some of the "issues" with tech implementations are getting solved (example offshore cheap hosting) so fewer reasons to hold back going forward. Also the consolidation means fewer recipients to improving IT budgets for software. I think its conceivable that psft for example could see a 50-100% increase in current license revenue numbers in late 2003 if one of the telecom sector or chip sector picks up. Right now they are making their numbers with only government. Even with a P/S of 2, increasing license revenue means the stock goes up. But the P/S won't stay at 2 will it if growth resumes.