SAN FRANCISCO -- The Internet and the year 2000. Enough said?
In 1998, those two phenomena, unimaginable 10 years ago, drove the software sector. So what surprises can we look for in the coming year? Much the same, say industry sources. Specifically, analysts and investors say they will be looking for companies to position themselves as providers of Internet-based applications and services. And they'll be looking for signs that IT spending will take a hit amid soaring costs for last-minute Y2K fixes.
Below is a list of events in the coming weeks that smart money will be watching for hints of developing trends in 1999.
Morgan Stanley Dean Witter Networking and Internet Conference: Jan. 5-7
Some of the software industry's biggest hitters will gather at an Arizona resort to kick off the new year. Participants include German enterprise-software giant
, database leader
. SAP will have a chance to explain how vigorous price-cutting in 1998 will reap profits in 1999. Oracle, meanwhile, has another opportunity to tout its new Internet strategy and explain why
SQL 7.0 won't even make a dent in Oracle's database market. BMC Software, which just received antitrust approval to acquire
Boole & Babbage
, will take the podium as the newly crowned No. 3 provider of software to manage computer systems.
Microsoft's Second-Quarter Earnings: Jan. 19
Microsoft -- you know them, you love them -- is expected to put in another great quarter. Big deal. Analysts and investors will be more interested in when the Redwood, Wash., software behemoth will finally deliver its long-awaited, much-touted Windows 2000 operating system, nee Windows NT 5.0. The system suffered so many delays last year that some analysts had pushed forecasts for its launch back to late 1999 or even later. But
Credit Suisse First Boston
analyst Mike Kwatinetz is hoping for better news, saying that Windows 2000 could come as soon as midyear. CSFB has no underwriting relationship with Microsoft.
Allaire IPO: Jan. 19
If Microsoft ends up with more delays to its Windows 2000 and Office 2000 releases (now
a year 2000 crisis), Cambridge, Mass.-based
initial public offering may be coming at an opportune time. The company develops Web tools, including server software for Internet development. Though it hasn't seen any positive net income since its inception on May 5, 1995, if the demand for Web technology booms as expected, profits could soon follow. And hey, it's an Internet stock -- who needs profits? CSFB is the lead manager in the $35 million offering.
Hyperion Solutions' Second-Quarter Earnings: Jan. 20
This Sunnyvale, Calif.-based company's stock has been dogged since early December on numerous rumors -- including fistfighting among company executives, having to restate earnings and missing its second-quarter earnings estimates. The stock halved its value in December and has been languishing near its lows. So look for the announcement of
second-quarter earnings to be a slugfest for this maker of analytic-application software.
Preliminary Results for SAP's Fourth-Quarter Earnings: Jan. 26
SAP, clinging to its lead among back-office-software providers, will need to have a strong showing to quell naysayers. Sluggish product development, a slowdown in the enterprise-software market and price cuts in 1998 have some analysts considering cutting their earnings estimates for the company.
Serena Software IPO: Mid- to Late January
By helping companies manage piles of their own software, this Burlingame, Calif.-based company has made customers of 36 of Fortune 50 companies like
. The IPO could be hot. The lead manager in the IPO is
Hambrecht & Quist
for $40 million worth of shares.
Goldman Sachs Technology Symposium: Feb. 8-12
will be among the highlights at the
in New York City. It will be the Pleasanton, Calif.-based company's debut presentation for the year after a marked slowdown in sales and several analyst downgrades in the second part of 1998 helped slice off nearly two-thirds of the company's stock price. Investors will be eager to see if they can expect a turnaround any time soon.
Dain Rauscher Wessels Technology Conference: Feb. 15-18
Yes, another investment conference -- this time, at the sumptuous cliffside
in Laguna Nigel, Calif. Highlights include presentations by middleware companies
New Era of Networks
. BEA warned in November that its growth would slow, but some analysts and fund managers shrugged that off as an isolated incident. They continue to expect the market for middleware to be huge in 1999 as companies get their old and new systems to work together. Could BEA outperform? This presentation may show signs.
Another company some fund managers will be watching at the conference is
. Verity, which develops software for corporate intranet users and e-commerce sites to retrieve information from a network, reported a third consecutive quarter of record revenue and net income in December. Its stock soared from around 4 in January 1998 to just over 28 by year-end.
BancBoston Robertson Stephens Technology Conference: Feb. 22-25
A week later, at the equally sumptuous but infinitely urbane
in San Francisco, other tech companies will show up at the BancBoston Robertson Stephens conference. One of the highlights could be
, which makes software that helps manage telecommunications network. It's a favorite of
fund manager Michael Hahn, who says he owns some in his portfolio and expects the stock to do well as the telecommunications industry continues to evolve. The stock ended the year around 10, in the middle of its 1998 range.
J.D. Edwards' First-Quarter Earnings: Feb. 24
This could be a key earnings report for
, the Denver-based enterprise-software company. Last quarter, the company warned of greater uncertainty with its customers. CFO Rick Allen said in December that the predictability of customer orders had dropped to six months from nine. At the time, he said this wouldn't be a problem. But he also admitted that it could potentially become one. Hold your breath.
Raymond James Institutional Investor Conference: Feb. 28-March 3
More companies, more touting. This time in Orlando, Fla., PeopleSoft will be slated to present again. Probably not as big as the Morgan Stanley Dean Witter conference that kicked off the new year, but nevertheless worth watching. In this market, a little information can go a long way.