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TWST: How does USinternetworking (Nasdaq:USIX) fit into these opportunities? What today makes that company stand out, or what time frame should investors be using as they assess its opportunity?

Mr. Bowen: USinternetworking is a very interesting play. Unfortunately, USinternetworking pre-announced that its recent third quarter would be soft versus the Street estimates. The company actually hosts eight different application suites, everything from BroadVision (Nasdaq:BVSN) to Ariba (Nasdaq:ARBA) to Lawson Software. Demand has actually been very strong. But for reasons that have yet to be totally explained, given the quiet period leading up to the earnings announcement, the company did indicate that across all eight platforms, its ability to generate revenue and customers this quarter will be weaker than the estimates from the Street. Nonetheless, on the positive side, the company has been very adept at holding its expenses in line. We think that the company has a very positive chance of hitting our EBITDA estimated loss for the quarter. This is something that investors really want to look at carefully. The stock has been driven down tremendously in the sub-$5 range, and ultimately we believe USinternetworking could spring back in the first half of 2001. This company is at the forefront of a sector that we believe will grow in leaps and bounds. While the sector has been rather slow in gaining traction, USinternetworking nonetheless is still in a very good position to benefit from the overall growth of the provisioning of remote application services.

TWST: Will that presage either a rollup opportunity or consolidation?

Mr. Bowen: Stay away from the word rollup. That has typically been very, very difficult and fraught with integration challenges. Rollups have not been successful over the last several years, given the integration issues. A rollup ostensibly makes sense in many spaces, but unfortunately culture issues and the systems and personnel issues to roll companies up make it very problematic to execute. Nonetheless, from a convergence standpoint, many of the managed services providers and ASPs will probably converge prior to going public and will then emerge as even larger, more successful public entities.

TWST: Will the capital be there?

Mr. Bowen: We think the capital is going to remain constrained for quite a while. The capital should be there for the A-plus management teams, particularly private capital directed at reasonable valuations. We have learned — and we keep stressing to investors — that there’s a lot of diluted pitching in the management teams out there. It has become an acute problem over the last 12 months. We think capital will be available but investors will be extraordinarily selective in the management teams that receive that capital. 60% of a company’s success in the services arena is really based upon the management team and its ability to execute. Investors will, and should, continue to focus on those management teams who clearly have successful track records and can garner credibility with the Street.

TWST: Does that execution include the strategic partnerships and the client relationships from the top players?

Mr. Bowen: Yes. You have to have proof of concept, proof of customers, and strategic relationships that are more than just prospectus-stuffers. These relationships really need to be garnering significant amounts of revenue prior to going public. That will be the proof, in our opinion, of a management team’s ability to execute its business plan.