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Technology Stocks : FirstWave Technologies (FSTW) -- Ignore unavailable to you. Want to Upgrade?

To: Mike M who wrote (7941)	2/11/2003 2:57:10 PM
From: TEDennis	Read Replies (1) \| Respond to of 9677

Conference Call musings ... Overall, I thought this CC was better presented than the prior ones I've listened to. For most of the "canned" part, it sounded like he was reading portions of his CEO Message that had been posted to the corporate website. Generally, RTB was more reserved with his comments than in the past. The overblown comments like "Disruptive Technology", "Industry shaking User Interface", and "I've never seen anything like it" were subdued. Every time he says something salesy like that, whatever he says following it gets lost in the prop-wash. I only noticed one major hype'ism ... "We're revolutionizing the industry". Hogwash! If he wants to sell, fine. Then become a salesman and sell. He's very good at that. But, if he's going to play the CEO role, he should act like a CEO. They talked about the the potential revenue source from private labeling of their technology. He stated that they had received "significant interest" in private labeling their "first generation Internet product", but hadn't capitalized yet on those opportunities. They're also thinking about licensing their CORE IDE. ("CORE" ??? An acronym for ... what ???) If they think they can switch gears easily from selling and supporting application software like CRM to programmer support tools, they're in for a big surprise. Those two consumer types are VASTLY different. The programmers will be far more demanding than end users of CRM. They'll need a different type of staff person to support programmers. The same kind of comment applies to their discussion of potential acquisitions. They'll "end-run" the customer acquisition cost. Acquiring technology companies is no cake walk. The idea of "buying a customer base" that is on a worn out product/platform has merits, but is also full of operational challenges. If the acquired company realizes that their existing product will be tabled, they'll look to replace it. And, they'll look to the company that acquired them first ... but also look at competitors. They'll have to go through the pain of a conversion. Might as well get the best bang for the buck. Historically, FSTW hasn't done very well migrating customers from older platforms. Case in point: Their own UNIX version of TakeControl. They lost a TON of annual maintenance fees because they didn't provide a smooth transition to the Windows product. Successful conversions don't just happen. There needs to be a focus on the process. FSTW better hire some talent in the "acquisition/merger" process before they attempt something like that. It's a LOT harder than it sounds. I know. I went through several of them with Computer Associates. Each one had its own set of unique challenges. Those that were handled appropriately had some success. Those that were mishandled awarded CA with a lousy reputation for taking care of their customers. There's a big risk involved in the acquisition game. But, I do agree that it's the way to grow a company. More comments later when I have more time. TED