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

To: mauser96 who wrote (2666)	10/13/1998 10:04:00 PM
From: Melissa McAuliffe	Read Replies (1) \| Respond to of 4509

Lucius, I have to disagree with this concept of ERP software becoming a commodity. And comparing multimillion dollar erp packages with word processing software or spreadsheets is absolutely ridiculous. For many many years now there have been software packages out there that could do most everything a user wants....the key is one way or another....some costing 10x more to implement, others requiring extensive modfications, etc. If it was that simple why does it take 6+ months often to evaluate. Why do companies spending thousands of hours evaluating....why do vendor do two and three day demos, etc.,etc. One would think if it were a commodity this wouldn't be necessary. Companies would just buy the least expensive and be done with it.. But that isn't so. It's never been that way historically and I don't see that day coming soon.

To: mauser96 who wrote (2666)	10/14/1998 1:26:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 4509

Lucius, the purpose behind my post was to point out that precisely because a good or service is not fungible and carries a high profit margin it cannot be considered a commodity. The existence of strong consumer preferences underscores this conclusion. Your discussion of learning curves also adds weight to my argument. Now contrast ERP vendors to the soft drink industry. KO is a strong franchise in the soft drink industry precisely because it has successful differentiated itself from its competitors thus avoiding being "commoditized". This has been accomplished through advertising which was sufficient to create the distinction in people's minds. Dairy companies have had no similar success. Milk is a true commodity, along with other goods such as paper, oil, wheat etc. I think that what people mean is that there is increasing competition within a market sector, and the word "commodity" is all too often used as a general purpose pejorative, and this characterization is often made without real informational content. Economic substitutes always exist, but their existence should not be used as evidence of commoditization. I don't mean to be railing at you -- you were just convenient. It's just that I have seen the same argument thrown at just about every company in periods of market downturns. TTFN, CTC