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

To: Pigboy who wrote (492)	6/12/1998 5:43:00 PM
From: treetopflier	Read Replies (1) \| Respond to of 2477

Pigboy, (Q) Was wondering, since i am very unfamiliar with middleware, just exactly, in lay man terms does open system processing monitoring do? (A) Transaction processing monitors like Tuxedo provide a means of transmitting, controlling and providing feedback about the outcome of a transaction between an application program and one or more data sources. So much for layman terms... Think of it as the plumbing with some intelligence to do routing, queuing, prioritization and integrity assurance, plus lots more. The 'Open Systems' part deals with Extended Architecture (XA) standards developed years ago. There was a vendor consortium, not unlike Javasoft, that developed these intercommunications standards. All major database vendors, e.g. Oracle built XA interfaces into their databases so that an XA compliant TP monitor could control commit/rollback processing within a transaction. There are many more functions defined in the XA spec that I won't go into here. (Q) Is this strictly for corporations running themselves or for consumers using someone's products (ie. for buying stuff on the Web)? (A) Used primarily by large corporations as a componentry in their applications, or by application software houses like Peoplesoft instead of writing their own proprietary middleware. (Q) You mention that Tuxedo is being used by Peoplesoft...is it also being used by SAP? (A) I have strayed a bit from SAP over the past couple years, although I made a bunch on their stock over the past 6 months. I believe they have an implementation scenario that can use Tuxedo as the middleware, but someone more current can probably comment further. BEAS sales folks -- are you listening? (Q) I thought Non-Stop from Tandem/Cpq was pretty successful...is its time really over? (A) No.. It was and is still successful, but I doubt CPQ knows what to do with it. I don't seem them growing this business. It will be a while before there is an Intel based Compaq machine with some Tandem Non-Stop variant running on it, if ever. Is CPQ planning to compete with MSFT for operating system space on Intel platforms? The CPQ crystal ball is VERY muddy with regard to how they intend to truly capitalize on Tandem's Non-Stop SW/HW architecture. I like Tandem a great deal. I still use my two handled coffe cup. They unfortunately have many new forms of competition, including highly available UNIX clusters from IBM, Sun, HP, NCR, others. Even NT is playing here now, but I wouldn't swap a Tandem Non-Stop Himalaya for anything Wintel can build. I think there is a reasonable chance CPQ will part with some of this stuff, simply because it doesn't fit in their plans. Tough to really separate much from the Non-Stop operating system tho. Very integrated. (Q) You bring up SQLNet on Oracle and how they should move over to BEAS for speed...do you really think Oracle needs to, or can they just make SQLNet better? (A) SQLNet and Tuxedo are only similar in that they link an application program to a database, or database to a database. That is where SQLNet ends and Tuxedo begins. Tuxedo is a lighter transport layer than SQLNet and the applications developed using it tend to be message based, rather than field oriented. Tuxedo also has advanced functionality that Oracle has developed within the database in some cases, and doesn't have at all in others. Oracle's replication capabilities, specifically asynchronous transaction processing, is similar to some of the functions that exist in Tuxedo, but the database is managing the transaction in Oracle's case, not the middleware. Oracle has always treated SQLNet like a black box, not a principal piece of the architecture for tuning large applications. There are very few actual tuning parameters in SQLNet. There isn't a graphical utility you can run to monitor what is happening in a SQLNet network. All the utilities Oracle has focus on the database and connections to it. This can become a long discussion, but ultimately, SQLNet can't deliver all that an XA compliant (Tuxedo) TP monitor can in a heterogenous environment and the world isn't all Oracle. (Yes Oracle has gateways to every meaningful data source out there). I'd really like to see Oracle acquire BEAS and aggressively push the product through their distribution channels. Tuxedo is complementary to SQLNet. Oracle would have a VERY LARGE percentage of the UNIX middleware marketplace if they did so, and I'd see a nice return on my BEAS investment. Wonder if ORCL holds any of those bonds BEAS issued? If BEAS keeps sliding into the low teens, this might become a reality. At under $1B in market cap, someone who currently isn't undergoing anti-trust litigation should acquire BEAS. If BEAS can get another good quarter on the books and get the stock price back into the $20's they'll be much harder to acquire. (Q) If you think BEAS may want SYBS, why would you short it? (A)SYBS is headed lower. I believe $5 over the next two months and $2-3 over the following quarter if they don't bring expenses in line. There isn't ANY patience for this stock left in the investment community. That is why I recommend shorting it. The premium any company pays for SYBS won't be $10 a share. It might be 20% or so of the existing price at that time. If SYBS is trading at $4.5 in August, with remaining market capitization of $400M or so, the acquiring company isn't going to buy it for $900M -- $500M maybe. I'll let you know when I think you should cover the shorts if you like. Not yet. SYBS is still too expensive for acquisition. At $2-3 BEAS and many others should show some interest. Pigboy, I don't see tremendous risk in BEAS as an investment in the teens. Worst case they dip into the mid to low teens over the summer if Asia continues to plague us. The upper bound has been $29 and there is a lot of volatility. Each analyst recommendation has resulting in movements of +30-40%. It wouldn't surprise me to see BEAS pop from its current levels to mid-20s as they continue to outline how their $200M will be used, but all this is happening at a turbulent time. Keep in mind the top two at this company are marketing types -- this is key. While some might consider Larry at Oracle a technologist, he is a salesperson first above all. Two other thoughts -- the companies replacing their aging applications to address Y2K problems are increasingly using these middleware technologies in lieu of 'fat client - client/server' application development tools. What doesn't get replaced between now and 1/1/2000 will be prime for retooling in second half 2000 and there will be plenty of human resources available to work on them after that time. Second, I read an article that the Japanese retirement funds have been prohibited from investing in US stock markets and that this is going to change next year. If so, there will be $1T shopping for companies like BEAS next year. They won't be buying SYBS. Fly low, sell high...