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.

Technology Stocks : Genesys Telecommunications (GCTI) -- Ignore unavailable to you. Want to Upgrade?

To: Clam Clam who wrote (46)	1/26/1998 8:53:00 PM
From: Bobo	Respond to of 220

This one reminds me more of ITWO than SEBL. SEBL's success has been built on 1) partners shortening the sales cycle and 2) marketing the idea of SFA ROI. ITWO & GCTI have based their companies on technology superiority. All are landing huge deals. I agree with the concept of technology superiority, but when I have heard McCloskey (CFO) talk, GCTI clearly sees partnering as leverage for growing the company. If I recall, GCTI has trained 250 third party consultants in each of the last couple quarters. In fact, I believe the only reason you have seen their svc rev grow over the last few qtrs is to address the quality issue. ITWO would be even more of a monster had they learned that trick. My AC friends are far more wedded to Manugistics than ITWO (maybe it's an industry thing since AC is big in CPG). A couple of other tidbits regarding GCTI... I spoke to a manager at a big insurance company who implemented GCTI's T-server in a major implementation. He compared the technical marvel of GCTI's engineers to that of Bell Labs (which he had worked for a bit). To me, that checked off the box "technical superiority". Over the last four qtrs, GCTI has ramped up their number of sales reps along the following: 27, 37, 50, 61. That is the kind of investment needed to grow the business. Besides the deferred revenue, this is what is holding operating margins to 10%. At some point after this early investment, operating margins pop up and compound the bottom-line impact of revenue growth. The crowd goes wild... As far as next qtr goes, I think management's goal is to sustain some level of sequential growth for as long as possible. I do not know if this is 15% or 20%. It will become clearer once one or two of these NSP deals kick in.