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Technology Stocks : Allaire -- Ignore unavailable to you. Want to Upgrade?

To: Bob Zeleznik who wrote (3)	1/7/1999 8:50:00 AM
From: Simon Withers	Read Replies (1) \| Respond to of 612

Alas I can't get in on the IPO though Schwab as I'm based in the UK, but here's my take anyway. I'm considering placing a limit order on the first day of trading, but don't have a handle yet on how much to pay. I love the company - I've used Cold Fusion since version 1.5, and think it's a great product, and was certainly way ahead of its time back then. I'm not so familiar with the more recent releases, as I mainly use Microsoft's Active Server technology for development now, and this is what bothers me: I use ASP because i) Price. ASP - free, Cold Fusion - $1,295 and up. Need I say more? ii) Customer pressure. Lots of people wanting to standardise on MS platforms. iii) I'm an old Basic developer, and so the VBscript based ASP, although more complex does come easy to me, and I've lots of old code lying around that I can recycle. However advantages of CF are: i) Much more fully featured - it comes with all kinds of bells and whistles which the ASP developer needs to write himself. ii) There is a run-time version with an encryption engine, so you can ship applications to customers without giving the source away. iii) Much more solid application. iv) Much simpler language to learn, and a very easy learning curve for anyone who already knows HTML. v) Not Windows or IIS Server dependent. The problem I see is that Cold Fusion has great attraction for those people who aren't full time developers - HTML designers who need to do some database integration work, advanced end-users who are capable of writing SQL, Excel macros and the like and want to knowck up some quick web applications, but are these people going to pay over 1000 USD for the software? Hmmm... I really believe that Allaire should produce a free or very low cost personal edition, which let's say, can only link to Access. Get people hooked like this, and once it is established in an organisation there will then be good reason to get the development teams using it also. That's how I got started with CF - Allaire used to give a freeware, slightly crippled version away with O'Reilly's website server, and within a couple of days I saw how great the product was, and sent my cheque off for the full version. Now, Homesite, their HTML editor. I don't use it myself - I prefer a plain text editor - but the rest of my team recently junked MS Visual Interdev and moved over to Homesite. It looks like a good product and is regularly cited as being the best-of-breed. There is a big market for this. I checked out the S-1 filing at Edgar: sec.gov At $16 per share the market cap will be $162 million. In the first half of '98 sales were $8 million, and growing at around 200% year-on-year. Impressive, but hard to keep up. I'll make a wild guess and estimate 98 sales at $20m going to $40m in 99, which gives us a Price/Sales ration of 8, dropping to 4 by the end of the year. Low compared to Microsoft, but still fairly challenging. ...So I don't know. I guess I'll see what happens in the aftermarket and maybe jump in early on. If words like internet and ecommerce get thrown around the price could easily go sky-high, but I'd rather buy on their fundamentals as a software tools vendor. The only other thing to add is that with that kind of value, it is an obvious takeover target for Microsoft or even better the new AOL/Netscape/Sun alliance, and could be worth having for that reason alone.