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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Mkilloran who wrote (6657)	11/8/1997 10:14:00 PM
From: Jon Tara	Respond to of 9285

While I have not bee following Citrix much lately, you could have a point. Microsoft does NOT like dealing with highly-specialized market segments. They want to put out the basic, commodity product, and they let others build on it. For example, Microsoft offers no auxilary spelling dictionaries for Word. If you want, say, a legal dictionary or a medical dictionary, you have to go to a third-party for it. It's been like that for years. I can imagine a scenario where a much larger customer base than that that currently uses WinFrame will use Hydra, MOST of those users never buy a Citrix product, yet Citrix sales increase, because of the the size of the overall customer base. The customers who buy the Citrix products will typically be the same ones that have already bought Winframe. Smaller organizations will probably be satisfied with and have their needs met by the base Hydra product. Citrix can provide the add-on functionality and performance enhancement products needed by high-end users. The availability of these products is essential to Microsoft's strategy, because they have to show customers scalability. By letting Citrix have this add-on market, Microsoft avoids development costs. (Indeed, Microsoft is avoiding almost all development costs, except for the payments made to Citrix, and the costs associated with Microsoftizing the manuals, etc.)

To: Mkilloran who wrote (6657)	11/9/1997 9:18:00 AM
From: Dan Lisman	Read Replies (2) \| Respond to of 9285

mkilloran, I knew that the original Hydra concept was Citrix based, but, I thought the new beta Hydra was a pure MSFT product. Are you sure of your info? If so, I need to get rid of my CTXS puts sooner, rather than later. Thanks, Dan

To: Mkilloran who wrote (6657)	11/9/1997 12:27:00 PM
From: Roger A. Babb	Read Replies (1) \| Respond to of 9285

mkilloran, you are correct that CTXS can receive up to $100 million in royalties from MSFT HYDRA sales. But that is only a drop in the bucket as to what revenue is required to support the CTXS market cap of over $2 billion. Winframe (based on NT3.51) will be a dead horse when HYDRA is available, maybe before as buyers wait to see it. CTXS has no other products that are generating significant revenue, if you disagree with this please substantiate your claim. Having $200 million in cash and a potential royalty income of $100 million over 2 1/2 years does not create over $2 billion in value. That is why the insiders are selling. If you are long, I suggest you protect your profits with stops or puts, there is no support between $57 and $72.