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

To: Elmer who wrote (4180)	1/7/1999 4:55:00 PM
From: ratlong	Respond to of 4509

Just an FYI that yesterday or the day before some reports came out that said that SAP was behind with their products. That might be a reason why is that they had fallen behind and now they are spending significantly more to try to catch up. Just some thoughts...

To: Elmer who wrote (4180)	1/7/1999 5:06:00 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 4509

David, just to clarify, I was in the engineering architecture area of ERP when I was involved directly in the business. Which means, I dont know much about the financial side of the business. Having said that, my sense is that Sap will have higher R&D expenditures for 2 primary reasons - one being their architecture is just more complex so it takes longer to get the same work done and (imo) there is some rework needed there - refer to Sap thread for a discussion on this. This is just my opinion. The second is that psft chooses to buy their R&D in the form of acquisitions vs the NIH syndrome that Oracle and Sap have. Im not sure if acquisition costs were somehow acknowledged in the analyst reports. If they are not, the the R&D comparison for psft vs. sap is way off. In fairness, Sap has a far more encompassing product line than psft so all things being equal they would fund more R&D work anyway. But my sense is that there are a few areas that sell ERP products, currently these are SCM manufacturing functionality and for some customers the intl currency issues are key, and those key areas are what drives sales. So, psft could focus on these, come out with better features in SCM, and win against Sap even though Sap had 100x the R&D expenditures because they were maintaining their GL and AP modules - this is hypothetical. An example of a company that this happened to lately was Oracle, the 8i project which was conceived and developed by a few has changed the fortunes of the entire company. So Im not sure dollar for dollar R&D expenditure comparisons will tell you much. Michelle