MGI Research

Wednesday, Jan 16th

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MGI Latest Research

MGI Research coverage enables IT executives, users and investors to make more informed, timely and critical go/no-go decisions on issues that directly affect valuations, market entry and exit, major investments, acquisitions and divestitures. MGI core quantitative research helps technology vendors and investors to more accurately assess and benchmark company operating performance and strategy and identify ways for improvement in growth, gains in market share and valuation multiples. MGI core quant data underpins MGI Advisory Services and Benchmarking engagements. Research themes focus on the major non-linear industry trends such as virtualization, cloud computing, SaaS, emerging mobile platforms, 4G, social media and Agile and their impact on the user, vendor and investor strategies. Access to MGI research materials is available by Subscription. Select research notes are available in our Research Store. Subscribers get priority access to all published research as well as analyst consultation. Among companies covered are Salesforce.com, Oracle, Google, Microsoft, SAP, IBM, HP, CA, BMC and others.


MGI Sector Update: E-Learning Software

Summary review of MGI Index scores of key e-Learning companies and outlook. Companies mentioned Skillsoft, Plato, Sum Total and others.

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Download this file (MGI Research Sector Update eLearning May 6th 2009.pdf)MGI Index Scores e-Learning Simmary

Oracle Acquires Sun Microsystems: Strategic Impact at a Tactical Price

Oracle's acquisition of Sun (Nasdaq: JAVA) comes at a tactical price but carries with it major strategic benefits to Oracle as it stands to reap benefits of a more vertically integrated stack. The accretive nature of Oracle's bid for Sun is underscored by the efficiency of Oracle's business model. When Oracle completes this deal, it will be strategically positioned vis a vis both IBM and HP, and will be able to compete more effectively for centrally controlled IT budgets. This transaction puts significant distance between Oracle and SAP, as Oracle will no longer be just a software company. To see the full content of this Research Note, please CLICK HERE.

OSBC Open Source Conference Highlights

We attended InfoWorld's 6th annual OSBC event in San Francisco, where the open source community convenes in a business setting.  The major theme was the attraction of open source products' low cost during a period of IT budget contractions.  Our major interest was to measure the relative success of open source companies in reaching the enterprise market and their ability to threaten the established vendors.  The short conclusion is that open source projects continue to make inroads into Silicon Valley development efforts, but as a business, open source companies have yet to prove their long-term viability with a business model capable of delivering attractive returns to investors.

Open Source Outlook - Do or Die Time?

27 March, 2009 - The outlook on 2009 enterprise IT spending looks grim.   The silver lining in the doom and gloom surrounding technology spending in 2009 may be found in open source technologies.  The popular business press is touting the notion that the recession could boost market share gains for open source technology companies.  To date, open source technology has not proven to be nearly as disruptive or profitable as once predicted.  Based on funding activity in 2008 and the distance open source companies have to go in reaching sustainable profitability, 2009 looks to be a make or break year for open source companies.

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Download this file (2009_Open_Source_Outlook_-_Do_Or_Die_Time_032809.pdf)2009_Open_Source_Outlook_-_Do_Or_Die_Time_032809.pdf

MGI Research - Model Portfolio Updates January 2009

For 2008, MGI Research Model Portfolios have significantly outperformed major market indices and hedge fundbenchmarks. This research note reviews 2008 performance results for MGI Research Model Portfolios and provides an overview of portfolio construction methodology and assumptions.
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Download this file (mgi research - model portfolios update - january 09.pdf)mgi research - model portfolios update - january 09.pdf

Software Maintenance Revenue - Sacred Cow or Hamburger Meat?

The current economic downturn has given rise to numerous pieces of fundamentally good analysis on software company valuations that use software maintenance payments as a basis for valuing a business. Comments like "this company sells at only 2X or 3X its maintenance revenue stream" have popped up in numerous conversations with tech investors and sell side analysts as well as in Barrons™. To access the full content of this Research Note, please CLICK HERE.

What is the Impact of Lehman Brothers Bankruptcy on the Technology Sector?

Today's filling by Lehman for Chapter 11 bankruptcy further highlights how the economic meltdown in the financial services industry will translate into significant demand destruction for technology providers. Techmarket is entering a new phase where the toxic effect of bankruptcies and mergers in finance spreads from a few companies to industry as a whole and makes all tech companies vulnerable regardless of size. Click here to read the entire research note.

Applications Software Vendors Benchmark July 2008 - The Strong Get Stronger and the Weak Get Weaker

This report is a comprehensive look at 75 publicly held applications software companies that range in size from micro-cap firms to the leading large capitalization software companies such as Microsoft, Oracle and SAP.   Using the MGI scores the study highlights key trends in financial performance of the sector and whether the overall sector is strengthening or weakening, and which companies are improving or deteriorating.  As the title of the report states generally the poor economic backdrop accentuated the already sharp differences between the winners and losers.   The report also highlights the exceptions to the trend, as well as discussing the outlook for the sector overall.

Attachments: (For Subscribers)
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Download this file (MGI_ASV_Benchmark_July_1st_2008_-_FULL_REPORT.pdf)MGI_ASV_Benchmark_July_1st_2008_-_FULL_REPORT.pdf

Are SaaS (Software-as-a-Service) Companies Vulnerable in a Recession?

Whether a real recession hits the US and spreads to the global economy or the US economy simply slows down in 2008, all software companies- enterprise-license oriented and software-as-a-service (SaaS)on-demand vendors alike will see a meaningful impact in terms oflicense revenue growth and maintenance renewals. This research note examines risks that an economic slowdown would pose to SaaS companies. To see the full content of this Research Note, please CLICK HERE.

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