Goldman Sachs Conference: Sterling's No Pure Net Play

Finally, a company that's not all Internet all the time. The chief operating officer of Dallas-based Sterling Software (SSW), Geno Tolari, was almost discouraging investors at the Goldman Sachs Technology Investment Symposium Friday from thinking of his company as an Internet play.

Many investors are looking for companies that build the backbone for the Internet because they are seen as a safer bet than obvious Internet businesses like Yahoo! (YHOO) or Amazon.com (AMZN). But Tolari wants no part of it.

"I don't see us as Internet infrastructure providers. Instead we provide Internet capability to our customers," he said, emphasizing that Sterling is a software company of which the Internet is only one part. Sterling Software focuses on application development, information management and the provision of information-technology services to federal government agencies.

The honesty is refreshing.

BEA Scores on Glitch

Sometimes a boast can backfire. One CEO tempted fate when he boasted of how his software helps to run E*Trade's (EGRP) site on the Internet.

In his presentation Thursday, BEA Systems (BEAS) CEO William Coleman ran through the list of his company's clientele for its middleware software. But when he mentioned E*Trade, it spurred a round of chuckles in the back rows. "Yeah, too bad it doesn't work," said one fund manager.

E*Trade's system had technical glitches for three days last week, causing an uproar among individual investors who use the system to trade stocks. The company attributed to the failure to a software upgrade gone awry.

Coleman made a quick recovery and explained that at least his software worked. "The problem was in the back end with an old legacy system," he said. At least now, E*Trade has made replacing that system a priority.

And guess who E*Trade selected to help fix the problem? No other than BEA, Coleman said.

E*Trade's snafu is BEA's gain. When BEA reported earnings last November, it warned of a $20 million slip in the January sales pipeline. Investors sold the stock off heavily, and the share price has yet to fully recover. That problem looks to have been resolved.

"I'm a lot less concerned now than I was before with what's going on in the external world," was all Coleman could say, citing a quiet period before the company reports fourth-quarter earnings after the market's close Feb. 23. Wall Street estimates BEA earnings of 17 cents per share for fiscal year 1999, ended Jan. 31.

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