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Technology Stocks : Siebel Systems (SEBL) - strong buy? -- Ignore unavailable to you. Want to Upgrade?

To: Melissa McAuliffe who wrote (1328)	3/31/1998 10:38:00 AM
From: seth thomas	Read Replies (1) \| Respond to of 6974

Melissa - I disagree with you that this will be "the most difficult quarter". Right now, the companies haven't even merged. They are doing some things together, but some things independently. There's leftover momentum. In fact, the next quarter may be OK too - backlog, etc. But, it won't be super strong. I predict the September quarter will be really troublesome. The challenge in this stuff is that what is happening today doesn't really show up for 4 - 6 months, given the long sales cycles and quarterly reporting cycles. For example, a customer internally, makes the emotional decision in April not to buy from Company S as opposed to company V, but may continue in the sales cycle for another few months -for negotiating reasons, for political reasons, whatever. Happens all the time. The sales rep keeps it on his pipeline report through the next quarter, as he perceives he is still in the thick of things. In July, the decision is formalized and announced to the vendors. You wouldn't see the impact (either way) on anyone's financials until the October report of the September quarter. That's 7 or 8 months before it hits! Plus, the vendors have probably been working with th ecustomer for 2 - 4 months before this "internal" decision. so, the cycle time from start of sales process to initial hit on financials is as much as a year or more. And, enterprise software generally involves multiple procurements and services revenue over time - a year. two years or more. So this financial impact cycle is easily 2 or 3 years. So, that's the challenge. Prospect sales problems with SCOP in late '97 and early '98 won't be apparent until much later this year. I have seen this many, many times. This is also good for VNTV, as while SEBL is scrambling to fix internal problems, get the products working together, etc., VNTV is able to continue to execute and pull their products further ahead technically.