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Technology Stocks : RadiSys Corp -- Ignore unavailable to you. Want to Upgrade?

To: Greg Jung who wrote (1291)	5/1/1998 2:39:00 AM
From: Robert L. Ray	Read Replies (1) \| Respond to of 1472

Well my take is that most of the Rsys product line is based in one way or another on Windows NT. I don't know the exact percentage but Windows NT enhancements are RSYS's main reason for being. Windows NT is gaining market share on the factory floor controlling factory processes at the expense of Unix and PLC's. (programmable logic controllers) RSYS's makes a software product called InTime which could be considered an NT overlay. It enables whatever the factory's NT pc is controlling to keep running in the event of an operating system crash. Also InTime gives NT the added capabilities of microsecond control over factory processes which is an NT weakness without InTime. Some factory processes require microsecond control and some do not. The coming introduction of NT 5 is going to be a huge, huge, big deal. It is a major OS release with major improvments over NT 4. As an OS release event it is more akin to Windows 95 replacing Windows 3.1 than it is to Windows 98 upgrading Windows 95. So with NT gaining on the factory floor already as the NT 5 release date nears there should be quite of bit of buzz/press/hype about it. So when this vastly improved OS comes out my guess is that more factories will go to NT 5/InTime solutions for their factory automated process controls in lieu of Unix or PLC solutions. The downside to all this is simply that as the release date of NT 5 grows nearer, companies will probably delay their purchases of NT 4/InTime solutions and wait for the more advanced technology. This happens all the time in HiTech. HiTech investing is all about catching a new product cycle at the right point. True it's a little early yet. I don't expect any big gains in the short term. I'm in Rsys this early simply because it came down so much in price. In looking at the RSYS homepage I noticed that Venturecom, and Imagination Systems are their most direct competetors. I hope to soon do a net search and see what I can find out about how these two companies are doing. I guess they might even be private. I've not had the time to check them out yet but it would be interesting to know how their sales are holding up in comparison to RSYS. Another company mentioned was Steeplechase Software. I really didn't get a good feel at to whether Steeplechase was so much a comtetitor or a seller of software that compliments the Rsys software. I saw that in one case at least a company was running NT, and the Rsys Intime, and also Steeplechase. I suppose another risk is that someday Microsoft will improve windows NT to the point that it doesn't need any software overlays to do the job. But I just don't really get the feeling that that is going to happen. Or if it does it will be many, many, years from now by which time RYSY will have adapted in some way or another to this. Keep in mind that NT solutions on the factory floor are in a very early stage in comparison to Unix and PLC's and companies are going to be very careful about trusting new technology to do the job. So I think that a lot of them will use the Rsys InTime as a sort of belt and suspenders approach since it enables things to keep running in the event of system crashes. Also it's my understanding that RSYS provides a pretty high level of customer service/hand holding on all of this which will be crucial to easing peoples fears about implementing new technology. Looking a little deeper into the RSYS sales projections, they don't look all that bad in this respect. 1st quarter sales were 33.7 million. The Second quarter projection is 28 million. In the first quarter IGT contributed 24% to sales. In the second quarter there will be nil/none sales to IGT. So if you take IGT out of the equation altogether then the sales will increase 1st quarter to second quarter from 25.6 million to 28 million. So at least the rest of their sales are holding steady. Sheese, I wrote more than I planned on:) Hang in there people. Be early in the technology new product curve even if it might take more of a dip than you'd care for it too. This might even go a little bit lower in the near term as companies put off new purchases in anticipation of the NT 5 rollout. BUT.... damn this is a cheap stock all things considered. And to close with a Dennis Miller quote "Thats just my opinion. I could be wrong"