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To: MulhollandDrive who wrote (7659)	12/30/2002 8:08:14 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 306849

i heard an analyst discussing software this afternoon...and i just caught the very end of the discussion....but one of the issues the guy raised was unemployment and outsourcing...what he called "butts in the seat"....he said until you see enterprise hiring, software will continue to be weak. Hmm, interesting. I wish I'd heard that piece. I THINK what he means by "butts in the seat" are seat licenses for things like sebl, SAP. Only the high end vendors have seat licenses, the lowend stuff like intuit just sell packaged software. Its a double-edged sword I'd say then... I never thought about this issue to be honest. There are some areas of outsourcing which encourage software deployment and user growth... I would say outsourced manufacturing for example. If you mfg in china and your ops are here you need in install software in china and here and all the maintenance and bandwidth to go between the two. Maybe a "seat license" for a chinese user is lower than the equivalent US seat license... I'm not worried about this though because automating outsourced manufacturing is a global, high dollar operation- I don't know how SAP or oracle charge to automate a chinese factory with local visibility but I am sure it isn't paid for by seat licenses in chinese yen. Otoh, there are some areas of software, call centers for example who are being totally outsourced to india and if those shops used to be here running peoplesoft, and now they are located in india... thats a loss of revenue for psft in terms of seat licenses that used to be here. I'm not sure what the net-net effect of outsourcing on software is given these issues... for the big software companies like SAP I'd say the gains they get from automating global business processes way outweigh the loss in seat licenses for some closed operation in india. But for the smaller firms... I don't know. Anyway I am mostly reacting to the strength in the oracle numbers last time around (new engine licenses component which is all that matters), strength in software stocks relative to mkt and the hiring picture I get from friends and hotjobs. Thats my rationale for thinking software is picking up. I'm not buying software in max margin or anything mind you. I just think sentiment is too bearish here, thats why I am trying to be careful and maybe scale into a few beaten down longs and not short anything. Long term, managing business processes globally is bullish for bandwidth and software though.