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Technology Stocks : BEA Systems (BEAS) - Undiscovered Growth Stock -- Ignore unavailable to you. Want to Upgrade?

To: Clint E. who wrote (438)	3/1/1998 6:07:00 PM
From: David Miller	Read Replies (1) \| Respond to of 2477

Good question, but this is probably the last place you should look for the answer. First up, this is an entrepreneurial company that identified "middleware" as a growing market. It put together a business plan that appealed to a VC, raised some cash, bought some "going concern" middleware from Novell, and some post-R&D stuff from Digital (ObjectBroker and DECmessageQ). They are financing both purchases from revenue flows, which appear to be mostly from the Tuxedo (ex-Novell) products. There is no doubt that their focus on this market has boosted Tuxedo sales, and that they are able to meet their payment schedules to both companies. Their competitors in this particular space include Top End and Encina. They are continuing to develop Tuxedo, witness the swag of announcements recently: beasys.com Then there's the vision - i.e. why did they buy a CORBA ORB and messaging software from DEC to go with the transaction-oriented middleware? They presumably intend to glue all this together into a super-IDE, in which they present a complete set of development tools to major customers. This is becoming an increasingly crowded market. Oracle has a concept it calls NCA, Sybase has something remarkably similar called ACA, Borland has a thing it calls the Infonet (marketing stumbled a little on that one, I think) based on their acquisition of Visigenic - another ORB manufacturer - while Iona is still independent and pushing from below with an ORB-based offering that will become increasingly powerful. At the same time people like Forte, Progress and Unify all have more proprietary aspirations to the same space, as do other approaches such as Template (slab of industry-relevant 'template' code forms the foundation of major apps) and on through to the SAPs and Baans and Peoplesofts of the world (ERPs), who advocate full application outsourcing. My personal opinion is that BEA will be a competent but niche player in this particular game, and that they will continue to depend upon Tuxedo revenues for survival. That's the customers and competitors in one paragraph. Can't help too much with the rest. Hope it helps. david

To: Clint E. who wrote (438)	3/1/1998 7:15:00 PM
From: KJ. Moy	Read Replies (1) \| Respond to of 2477

Clint, <<<Could you or ANYBODY ELSE kindly explain what it is that BEA Systems does,who their customers & competitors are, what kind of pricing structure and distribution channel they use, if their success is tied to any other SW, product, or company, and if any of their competitors is scheduled to release new software in the upcoming months,...????>>>> I've been checking BEAS just the last few weeks and recently took a position on it. The concept they have is not new. However, I think they've done an excellent job in 're-packaging' some old software, added new functions, integration technique(such as JAVA support) to fill a gap. One of the biggest problem for large/middle size companies is that they find themselves in need to tie some stategic computer systems together. These same computer systems were installed years ago in different computer platforms(such as IBM, SUN, HWP, PCs, etc) for various departments. There were no need to communicate between them in real time. May be, once a day, files can be converted from one platform to another just that the payroll department can verify some accounting data that happened yesterday. The need for real time online across different computer platforms is growing fast everyday. To make a long story short, BEAS bought the source code of some software which were developed years ago from Belllab and maintained by Novell. Convinced someone to give them $50 mil. Off they go. Their competitors are all the big boys you can find. But, here is the interesting point, some of these same competitors are also buying and selling BEAS products. Middleware software is growing fast and I think BEAS is well positioned to reap in big profits. It was evidenced from the last few quarters with last quarter's earning at 7c while the street was expecting 4c. The market is big. BEAS can grow IMHO at 70% to 100% yearly for a long time. Companies can use BEAS's software to bridge seamlessly across multiple computers in a short time without spending months or years to re-write programs and convert files. Sure, they have competitors. But, their customer list is very impressive. Go to their website and check them out. KJ