Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Documentum (DCTM) Software -- Ignore unavailable to you. Want to Upgrade?

To: Ariella who wrote (480)	4/2/1999 10:54:00 AM
From: Michael Watkins	Read Replies (1) \| Respond to of 600

Ariella, I'm not sure that not providing guidance will make things any less volatile, but its a strategy I guess. Sales management has not changed simply because of Y2K. Certainly they can qualify their prospects for failure to complete risk and factor that into projections. - is their opportunity funnel big enough and contain quality suspects and prospects - are their sales folks productive - are the markets they dominate getting tapped out - are there trends in the industry that are not obvious to investors (such as price squeeze, new and different competitors) but obvious to the company - they sell a lot into their install base, is that market getting tapped out? Organizations that commit to these types of projects do not do so on a whim. There are fairly serious dollar and time commitments required to put these solutions in place. Lining up a business case, getting executive approval, assigning people - there are many opportunities throughout the process to take the pulse. Sure, from time to time there will be shocks to the process (major events, executive change over, etc) from time to time. But developing reliable projections should not be so difficult. The events of the last three months increase my concern over their ability to be reliable. Not to mention that they had a slight miss last quarter, reduced expectations, and now a big miss. The problems seem to be accelerating. The Street views that as a problem, guidance or not. In hindsight it now appears that the stock deserved the big haircut! Smart sales folks closed their deals last quarter and this quarter. I tend to think that DCTM has some smart folks. The risk is that prospect quantity and quality is poor and deteriorates further, if the 'best has passed' already for this year. I agree, it is not a fly-by-night firm. But it does look like recovery could be a long term process, and I think it is wise to look at how things will look out 12 months from here. The industry may be somewhat different by then. I am quite certain that software license costs will be lower than they are commonly today, that trend has been acclerating in the industry over the past 24 months. While the services component may not change, I tend to believe that the technologies involved will continue along the trend to becoming commodities. Can they deal with that? Will their new web applications help support high margin, big ticket deals? I don't have the answers for these questions. Michael