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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: investorgal who wrote (10048)	3/25/1998 12:41:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 14631

I have some thoughts on your proposal that it is essential for Informix to partner with application vendors in order to sell their database product. This approach will not only serve to leverage Informix's sales efforts, but will allow Informix to sell to customers that have no interest or understanding in the technological advantages o their database products. First off, isn't it true that Bob F has decided to focus essentially on the more lucrative (but harder to sell) accounts where they can leverage the technical advantages that their database product can provide the customer? This is different than seeing their database product more as a commodity item which I think would refer to Microsoft's product. Even Oracle may see their database software more like a commodity since they have application level software to sell. So Oracle may be more willing to discount their database software knowing this, particularly if they are making money on their application level software as part of the deal. Perhaps this is why Oracle placed less of an emphasis on "one upping" Informix with respect to database technology where they delayed the introduction of their object oriented database technology so they can focus on other efforts that may more directly relate to the generation of future revenue. Oracle is a good example of a sales and marketing driven company. Unfortunately Informix does not have this advantage going for them where they can lead with their applications in the sale of their database technology. Instead they need to sell the technological accomplishments that are a part of their database product to an audience for the most part that does not understand or even care about database technology unless they can see it in specifically in terms of application level benefits. Informix without using applications in this way as a vehicle to sell their database products will have a hard time peddling their database technology except to customers with specific needs where Informix products would have the "edge" over their competition. This includes uses that require performance for the handling of large amounts of data like data warehousing and customer needs that require the flexability that the US provides in handling specific non-native types of data such as multimedia for Internet solutions. Technology is always a hard sell, where application level functionality is much easier to sell to the more typical customer. However Bob F's strategy appears to be pursuing this type of sale, thinking that since their product will be meeting specific needs that are not readily found elsewhere in other products this will lead Informix to the more (lucrative) sales. So I suspect discounting may not be as much of a priority with his approach to sales as it would be in a sale that has the database product bundled with a suite of applications. This type of "technology based" sale requires a more agggressive sales and marketing driven effort by the company, not an effort just to log some sales for the PR machine to publish. This is one area Informix needs to work on given the direction they chose to take to sell their database products. I think a route to a brighter future for Informix would be to hide the database technology that they have to sell and make it into a more commodity type of item with respect to the customer which is the approach that their competitors have taken, each in their own way. As mentioned above, this approach to business the application is making the sale instead of technology. Using this approach to future sales, I can also see where a close relationship with application vendors will help to sell their database technology even when their is no actual technological advanrtage to the customer in going with Informix over Oracle. Actually I think Informix will find this type of sale more necissary for their future instead of waiting for application needs to develop with the marketplace that would require the use of very scalable performance oriented technology or object oriented technology to manage. In a combined approach, Informix can go for both the higher-end "special need" customer ala Bob F and the more common "if I need an Informix database product to run this nifty suite of applications from BAAN that I feel I really need, then buy it" type of customer. Like you, I believe this partnering with application vendors approach to future sales will allow Informix to sell much more of their database products and stay in business. But then this would require a fundamental shift in how Informix goes about selling their product. Their customer now becomes companies like BAAN and SAP that may have different requirements in their product than the more typical customer who is the end user. Anything Informix can do to make doing business with them more attractive to companies like BAAN and SAP would then be in Informix's best interest. The sales force of Informix will need to work more closely with the sales groups of their application partners. By helping their application partner sell applications, they are actually generating sales of their database product. This relationship also needs to include a positive consulting relationship between them and their partners, for instance adding features and developing tools that would make it easier for companies to work with their product in developing applications that sell, and so forth. I can even see where the datablade if properly packaged can substantially add to the ability for an application partner to customize the database software to their needs for developing applications. The end result is that their application partner's sales group's success is helping Informix sell more product. Bob Graham