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Five analysts and top management from eighteen sector firms examine the Document & Database Management Software sector in this special 93-page issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info407.htm

TWST: Would you begin by telling us which storage hardware and software companies you follow and how these companies fit into the technology sector?

Mr. Hargil: Storage is what you use every time you save a document, retrieve any sort of information, or even use your credit card. Most all data generated by us is saved nowadays, most likely in a semi-permanent fashion. Storage hardware are the large machines containing disk drives or tape back up where the data is actually saved. Storage software helps users utilize their hardware in the most efficient way possible.

TWST: On the pure storage software side, you cover Veritas (Nasdaq:VRTS) and OTG Software (Nasdaq:OTGS). Which of these companies are you most optimistic about?

Mr. Hargil: It’s a twofold answer in that the companies I am most optimistic on, I am least optimistic regarding their stock valuation. Having said that, the company I like the most is Veritas, which happens to be the largest independent storage software company. I very much like the products the company has; I like its market position. But I am concerned that this company is still highly valued in the marketplace, to the extent that may not be sustainable in the short run. I think that it is possible that we’ll see the stock pulling back from here some more.

TWST: What is your rating on Veritas?

Mr. Hargil: It is also an Accumulate.

TWST: What would it take for you to change your rating?

Mr. Hargil: Essentially for the price to pull back substantially so I can see this as being more in line with what I’m anticipating as reasonable value for the sector. Currently, the stock is trading at well over 2 times the enterprise value to revenues and p/e ratios of all its competitors. I would like to see them pare those numbers back a little so I could be more comfortable that they have sufficient upside.

TWST: What do you anticipate for the hardware and software storage companies in the second half of 2001 and looking out further to 2002 and 2003?

Mr. Hargil: I think the main message as we go forward here over the next several quarters is that we will be looking at hardware continuing to have a difficult time both in terms of absolute sales as well as margins continuing to decrease because of lower purchase numbers and discounts. On the software side, I would continue to look for innovative solutions that improve the way people can utilize their hardware. People who spend a few million dollars to buy a storage system are very motivated to spend a few hundred thousand dollars on software to make sure they utilize it in the best way. The software investment in relative terms is not a major investment, and I think that it is definitely a growth area going forward.

This special issue includes:

1) Document & Database Management Software - In an in-depth (10,300 words) Analyst Roundtable, Robert Austrian, Managing Director at Banc of America Securities LLC, Brendan Barnicle, Vice Principle at Pacific Crest Securities and Christopher Shilakes, First Vice President at Merrill Lynch & Co., examine the outlook for the sector including, long term trends, developments in technology and share specific stock recommendations.

2) The TWST confidential Off-The-Record survey of management performance at seven sector firms asked market insiders about the ability of management teams to create shareholder value.

3)Storage Hardware & Software Stocks - In an in-depth (2,600 words) Analyst Interview, Nitsan Hargil, Senior Analyst at Friedman, Billings, Ramsey & Co., Inc. examines the outlook for the sector and shares specific stock recommendations.

4)Enterprise Software - In an in-depth (2,000 words) Analyst Interview, Greg Vogel, Managing Director at Banc of America Securities LLC, examines the outlook for the sector and shares specific stock recommendations.

5) CEO interviews (average 2,500 words). Top management of eighteen sector firms examine the outlook for their firm and the sector.