Technology Stocks

On-demand Software

Here at TWST, we also provide on-demand software for event registration.  We serve most of the investment banks who do not (wisely) choose to build their won – and a lot of the Companies Analyst Days too.    So we can echo every word here spoken by Bradley Mook Technology Analyst at Boenning & Scattergood.

TWST: Are there barriers to entry here or is it a free for all?

Mr. Mook: It’s still a bit of a free for all. Certainly expertise is necessary in the application area. You have to know what you’re designing the application for and be able to code it, and there are intricacies involved with hosting and maintaining the software. It is a lower-cost entry, though, so that does make it easier for competitors to enter the market. That and low customer switching costs actually keep the software companies on their toes. It means they need to continue to innovate and provide good service.

TWST: It sounds like a successful model. What’s the risk in the space?

Mr. Mook: At the end of the day, the software needs to do what it says it is going to do, because with low switching costs for customers, the software vendor is more easily held accountable. Also, as a software buyer .. there’s complexities for buyers. Do I choose the small best-of-breed provider that has a great application or do I go with the more established vendor that has a broader vision, but may not be the best in the individual application areas? You don’t just go out and buy Oracle (ORCL) – now you’ve got to figure out how to invest in this space.

This is from our Computer Software Report this week.

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