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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (1818)	5/9/1999 10:41:00 PM
From: Grantcw	Read Replies (1) \| Respond to of 54805

Mike, Thanks for the reply. Here are my thoughts... I'd be interested in why you think it's in a tornado. Well, as you mentioned, there is no consistent 25% quarter over quarter growth. If that's the definition of a tornado that we're using, then I spoke too soon. On the other hand, as of last quarter, year over year revenue growth was 67% for licenses and 124% for maintenance/consulting revenue. Maintenance/Consulting revenue has almost caught up to the license revenue and is growing at a much faster clip. Considering the lower consulting revenues occuring nationwide due to the diverting of resources to the Y2k problem along with the quicker-growing consulting revenues overtaking the licensing revenues soon, I think Siebel is probably right on the verge of a tornado, hopefully officially starting next year. I may have spoken too soon in my last post. You raise an interesting point. In other value chains, do companies create products to work exclusively with the leader in a market segment? If so, what are the similiarities and dissimilarities with the current front office business environment? Sometimes companies do. Looking at the Windows operating system, I believe companies were creating products optimized for Windows during its battle with IBM. I may have been a bit young at the time of the battle and wasn't paying too much attention to the fight, might need some back-up from the techies in the know back then. On the other hand, I don't think products were really optimized to be used with Intel's pentium chip. If they were, I can't imagine that the optimization produced a big difference in use between the Intel and AMD chips. Intel's gorilla-ness came from the large OEM's marketing their boxes with the "Intel Inside" imprint. I think Siebel's current situation is looking more like Intel. They have Sun and Compaq (others?) marketing their products for them. If the company can get many of these agreements, hopefully exclusive, they will be a gorilla, a la Intel. Do you know of any currently exclusive agreements? Are Compaq's and Sun's exclusive? Do Siebel's competitors have exclusive agreements with large companies? The ability to keep increase prices is definitely a huge plus for a business model, but it may be more a benefit of having the exclusive value chain ties mentioned above than anything else. It's definitely excellent that they could defend their market share vs. Oracle's price cutting moves. Thoughts/Comments? Thanks again, Grant