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Technology Stocks : RATIONAL SOFTWARE- BUY OR HOLD -- Ignore unavailable to you. Want to Upgrade?

To: stephen wall who wrote (2557)	7/10/1998 9:10:00 PM
From: Mark Lines	Read Replies (1) \| Respond to of 3115

If you look at the latest versions of all the software development tools such as Visual Basic, Powerbuilder, Delphi, they are all more OO than their previous releases. What does that tell you? Everyone knows that OO is a good thing, but it is very difficult to master. I was first exposed to it about 5 years ago, and am only now starting to feel proficient. Aside: remember that these tools are used to construct the system, which is actually a small part of a complete system implementation effort. Much time is spent up front doing the Analysis and Design of HOW to build it. It is great to have an OO programming tool, but you build junk if the design is not done well. Rose has interfaces to all of the above tools so regardless if you are a VB or PB shop, you still use Rose for the upfront Analysis and Design. You can then generate your "classes" based on this work in Rose. This is also an unbelievable time saver. Fact: OO = good systems. Regardless of who wins the programming tools wars, Rose is still the defacto choice for the upfront A & D! Anyway, what I am saying is yes, this is a one-way road that everyone is travelling down. But it will take some time before everyone "gets" it. Even new grads who are not prejudiced by older structured techniques will take 5 or so years to truly understand OO design. The key is, that there is no disagreement that OO is the way to go. Rational provides the tools to manage the complexity of an OO project. More importantly, their consulting services, books, and the training done by their partners is the key to speeding up the acceptance of the OO approach. Once people accept and understand the process, Rational is the obvious place to go to get the tools. Sorry for the essay, but I could write volumes on this. The bottom line is that Rational is going to make truckloads of money, but maybe not this year, or next. However, it should be a core holding in any long-term technology portfolio (if there is such a thing). If you are looking for a trading stock, this is probably not the one IMO. Regardless of what happened this quarter, I plan on owning the stock 2-3 years from now. By the way, it should be obvious that any tool vendor would love to own Rational (especially Microsoft or Sun). I think that Rational would fight any takeover because their independence is very important to them, but this possibility adds an interesting twist to the valuation of Rational.

To: stephen wall who wrote (2557)	7/11/1998 6:13:00 AM
From: Hans-Erik Eriksson	Respond to of 3115

Stephen, Re: Agent Programming > I would like your opinions ,when you have time, if you think > this is a coming groundswell or am I falling victim to hype > and wishful thinking. And,if so, will this fit nicely into > Rational's playground. I'm not really an expert on agents but like you I hear more and more about them, especially for the Web. Agents are autonomous, intelligent, mobile software objects that cooperate to perform services on behalf of users or other applications (typically transforming the Web from 'pull' to 'push' technology). Java is mentioned as an ideal language for implementing agents, because of its byte-code portability. Anyone interested, check out (where also different players in this area are mentioned): ovum.com To my knowledge, Rational has no direct stake in agents. But since agents definitely need to be supported by object architectures and they need to be modeled, many of Rationals products are there to support the development and deployment of agents. So indirectly Rational is favoured by agents, as they are by any progress in the use of object-oriented technology. I agree with Mark as for the future of both OO and Rational (though "Fact: OO == good systems" is taking it a bit far, I've seen quite a few really bad OO systems - not because of the paradigm being wrong, but because of serious mistakes in analysis and design). I think the challenges for Rational ahead are: * Completing the integration of their product portfolio. * More marketing and selling of their process (which recently was renamed to "Rational Unified Process" for marketing reasons). Once people get the process, they will also buy the tools. I see many people buying Rose who really don't know how to use it, thus giving up on it. * Holding and increasing their technical lead in the products (I want to see full UML support in Rose!) If they succeed with those, and I think they will, I fully agree with Mark and others that this is a excellent 2-3 year stock. I still love the quote from Ivar Jacobson (1997): "Today 2% of all software development is done with some kind of blueprints, in a couple of years that number will be 20%, and in five years it will be 100%". Best, Hans-Erik P.S. > BTW Congratulations Hans-Erik. I see you book advertised > everywhere. Always good to hear, thanks!