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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: aps who wrote (2457)	10/3/1998 10:43:00 PM
From: Tom Smith	Read Replies (5) \| Respond to of 4509

OK folks, I've relistened to the conference call and I have transcribed those portions which are relevant to the issues mentioned by the analysts who downgraded PSFT. There are three relevant sections, which I am going to give in separate posts immediately following this one. They are as follows: (1) A couple of questions from Chuck Phillips of Morgan Stanley, who downgraded PSFT from "Strong Buy" to "Neutral." Phillips was indeed the analyst who asked specifically about aggressive pricing from SAP, as I suspected. I think it is clear from the transcript that Phillips has been hearing of SAP price-cutting for a while. He seems to have ignored Ron Codd's response by cutting his rating. (2) A series of questions from Rick Sherland of Goldman Sachs, who took PSFT off his recommended list and rated it "Market Performer." (3) Some comments from Dave Duffield (CEO) and Aneel Bushri (Senior VP of Product Development and Marketing) about PeopleSoft's competitive position vis-a-vis SAP. My take on the whole SAP issue is that PeopleSoft seems to have hurt SAP during the first half of 1998 by scoring some competitive wins, and SAP is now punching back by targeting the HR and public sector areas with lower prices. I find this situation very interesting -- PeopleSoft is fighting SAP by enhancing the functionality of the product, while SAP counter attacks by cutting prices. Ron Codd's answer to Phillips' question reflects PeopleSoft's strategy exactly and I think it is the only sane way to look at the situation. Duffield's comments are also illuminating. Anyway, the items listed above will follow. Enjoy. Tom