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

To: Lizzie Tudor who wrote (2135)	10/14/1998 1:36:00 AM
From: Mike Buckley	Read Replies (2) \| Respond to of 6974

Michelle, First, thanks for the quick response about supply-chain management and front office stuff. Since you and others are considering Vantive as a low-valuation idea, I've got a couple of thoughts. I agree to a certain extent with the person who suggested that it's not a good idea to try catching falling knives. More troubling to me is that Luongo went on public record after reporting dismal Q1 earnings that his sales team wasn't qualified to sell to the CEOs and CFOs now making the front office decisions. A friend in the biz suggested that the real problem is that Luongo had been spending too much time playing tit-for-tat with Thomas Siebel instead of minding his own store. When the Q2 earnings report came out I saw strong growth in licensing revenue, which ofcourse suggests that the sales team was doing its job. The problem appeared to me not to be with the sales effort but with costs that were out of control. That's a management issue, not a sales issue. I'd like to see Q3 numbers before having a stronger opinion about the whole situation. If Luongo was blowing smoke, it probably is good news in a way because it's easier and faster to get costs under control than to strongly improve a sales force. (He did hire a sales VP from Apple soon after "blaming" the sales team.) On the other hand, if he was disguising the real problems, that's a tough nut for investors to swallow. Interestingly, just weeks ago Tom Siebel attempted to distance his company from the ERP vendor's problems. While the ERP folks were complaining about longer sales cycles caused somewhat by decisions being made by CFOs and CEOs, Siebel said that SFA purchase decisions are still being made by the sales veeps, not the CEOs and CFOs. His point was that the SFA market is not having to contend with lengthening sales cycles. Was Siebel making a big distinction between SFA and the other front office apps, or was he making a distinction between front office apps in general and ERP apps? The qoute I saw was out of context to the extent that I wouldn't want to form an opinion about that. Back to the idea of front offive low-valuation opportunities. Anyone considering Vantive might be interested in Remedy. Remedy is in a different market, the internal help desk market, but it's still critical to the front office. Like Vantive, Remedy had sales problems that are hopefully in the process of being, ummm, remedied. :) Remedy has a 45% market share, more than twice the nearest competitor. Their balance sheet is rock solid and the company isn't going to fall off the face of the planet simply because it had a sales blip. For the record, I've owned Siebel shares awhile and dared to catch Remedy's falling knives at $10.00. So far the scars are barely noticeable, but I'm prepared to take suggestions about plastic surgeons if the stock tanks. :) --Mike Buckley