Enron Mail

Subject:U.S. Bancorp Piper Jaffray - Survey Results
Date:Mon, 15 Oct 2001 09:36:33 -0700 (PDT)

Thought you might be interested in this survey.

Did you know that more Monopoly money is printed in a year than real money
printed throughout the world? Did you also know that we would greatly
appreciate your participation in our survey (see below)?

This report is available in PDF format (55.4k) at

II. Survey Says

Thanks again to everyone that took the time to respond to our survey. We
will conduct similar surveys in the future in order to keep our fingers
ever closer to the pulse of e-business activity. We greatly appreciate your

This survey's results were interesting, and provided us with quite a bit of
insight. At the same time, the responses to many questions were
conflicting, reflecting the current state of uncertainty within the sector
and the overall economy. The survey's participants came from a wide variety
of professions, though more than 50% came from consulting firms and
software companies. Please find an overview of the responses we received
for each of the questions, grouped by category, along with commentary

Have we reached a "bottom" in terms of the decline of corporate spending on
e-business initiatives? Unsurprisingly, there was wide disagreement on this
topic, with 45% of respondents replying "probably," yet 43% countering with
"probably not."

45% Probably
43% Probably not
4% Definitely not
8% Not even close

When will we see a meaningful uptick in corporate spending on e-business
initiatives? There was also disagreement on this topic, though 90% expect
an uptick at some point during 2002. True bulls (the 8% who answered
"Q401") and true bears (the 2% that selected "2003 or later") were few in

8% Q4 2001
47% Early 2002
43% Late 2002
2% 2003 or later

In our view, we may have reached a bottom during the September quarter, as
this quarter is seasonally weak in any year, and this year witnessed one of
the most challenging and paralyzing times that the United States has
encountered in years. However, we do not necessarily expect to see a
significant uptick during the next few quarters, as we expect the economy
and corporate earnings (which ultimately drive capital expenditure and IT
budgets) to weaken further during that time. The key question is when
corporate executives will sense a stabilization in their businesses, and
thus begin to feel more confident about investing.

IT Spending Priorities And Architecture
Please rank the following application categories, in terms of strategic
importance to the organization and likelihood of receiving IT budget
approval over the next 12 months. Of the categories available for
selection, supply-chain management ranked No. 1, closely followed by
customer relations management (CRM), e-procurement, and application
integration. Human capital management, product life cycle management, and
application server software were at the bottom of the list.

1 Supply-chain management
3 e-Procurement
4 Application integration
5 BI/Analytics
7 Application server software
8 Product life cycle management
9 Human capital management

How important a consideration is 100% Internet architecture when evaluating
e-business software products? The soft economy does not appear to have
tempered enthusiasm for new technology, as 45% answered "critical," with
another 45% responding "somewhat important." This was summed up by one
participant, who wrote, "the traditional software model is dead; the
importance of pure, Web-native architecture is critical to unleashing the
full potential of interenterprise e-business initiatives." Only 10%
responded "not very important" or "does not matter." In light of these
responses, it should come as no surprise that the vast majority of vendors
are now moving at breakneck speed to bring truly Web-based products to

45% Critical
45% Somewhat important
9% Not very important
1% Does not matter

Marketplaces And Portals
Despite the spectacular rise and fall of public marketplaces, many
participants remain bullish on marketplace technology. Additionally, most
respondents envision portals emerging as a central part of the IT
ecosystem, though response here was less positive than for marketplaces.

Will the use of e-marketplaces (private, public, or other) eventually be an
important piece of a corporation's e-business initiatives?
More than 90% answered positively, with 50% saying "without a doubt;" 41%
responding "probably;" and only 1% saying "definitely not." As our readers
have seen us comment many times, we believe that the bulk of future
marketplace activity will be centered around private marketplaces.

50% Without a doubt
41% Probably
8% Probably not
1% Definitely not

Will corporate portals eventually constitute the main "window" through
which users are able to access multiple, heterogeneous software
applications, along with relevant content, analytic analysis? Slightly less
than 90% responded in the affirmative, with 34% saying "without a doubt;"
and 53% responding "probably." While we agree that portal technology is
important, we believe that the jury is still out on whether or not this
will prove to be a profitable, stand-alone product offering.

34% Without a doubt
53% Probably
12% Probably not
1% Definitely not

Suite Versus Best-Of-Breed
Respondents were by and large not in the suite camp, though they drew a
clear distinction between emerging and mature technologies.

Which approach will win over the long run, a best-of-breed approach or
buying an entire suite from a single vendor? Only 13% voted in favor of the
suite approach, though only 30% voted for best-of-breed. The majority (57%)
opted for the more neutral answer that "best-of-breed will win when dealing
with emerging technologies and the suite approach will win when dealing
with more mature technologies." The comments of one participant stressed
the difference between mission-critical and less-important functionality,
and offered hope for smaller vendors, particularly those with vertical
focus. He wrote, "corporations will opt for best-of-breed software where it
addresses part of their mission critical activities, but will opt for a
suite activities that are not central to their core business. As a result,
many niche vendors will emerge as very important, particularly those that
correctly and deeply solve specific problems in a given vertical."

30% Best of breed
13% Suite
57% Best-of-breed will win when dealing with emerging technologies and the
suite approach will win when dealing with more mature technologies

Obstacles To Adoption
Regarding obstacles to adoption there was little consensus among
respondents, though it was clear that many obstacles remain, and remain

With respect to obstacles that inhibit broader adoption of e-business
software solutions, please rank the obstacles below. All obstacles listed
came in neck-and-neck for the lead, with "user adoption: challenges of
changing business process and behavior" topping the list. One person
commented, "success of implementation resides in a company's ability to
manage change and understand that this is not a system added or a plug-in,
but a new approach to the existing way their businesses is conducted."

Regarding "integration challenges with existing, internal applications,"
one participant wrote, "integration of applications in a timely and
cost-effective manner continues to be the single most important challenge
facing e-business adoption." The challenges involved with data mapping was
also cited as another key obstacle by one respondent.

1 User adoption: challenges of changing business process and behavior
2 Integration challenges with existing, internal applications
3 High cost and lengthy time of implementation
4 Questionable or insufficient ROI
5 Integration challenges with external business partners

Market leadership
Who will be the most important e-business software vendor in five years? On
this front participants ranked Microsoft No. 1, followed closely by Oracle,
SAP, and IBM. Sun also appeared as a write-in candidate. However, stressing
the ever-entrepreneurial nature of the e-business software sector, one
respondent commented, "it is very possible that the most important
e-business software vendor will be a start up who is not on anybody's radar
screen yet."

1 Microsoft
2 Oracle (#)
5 Siebel (#)
6 PeopleSoft (#)
7 i2 (#)
8 BEA Systems (#)

As always, we welcome your thoughts and feedback. Regarding this survey
specifically, we would be particularly interested to hear your opinions on
the results, along with your thoughts on additional topics that are worth
exploring in future surveys.


Retek Inc. (#@) won a follow-on contract with WH Smith PLC, a U.K.-based
magazine and book retailer. WH Smith had previously installed Retek's
logistics product, and has now purchased modules from within Retek's
merchandising and supply-chain offerings.
Niku Corporation (#@) announced the general availability of its new Niku 6
SRM (services relationship management) product.
MRO Software (#) released the Web-based version of Maximo. Users will
benefit from lower cost of ownership, enhanced functionality, reduced
implementation time, more open platform, and increased scaleability.
VerticalNet (#) preannounced that it deliver revenues in line with guidance
and EPS ahead of expectations.

Some or all of the following hedges may pertain: (#)U.S. Bancorp Piper
Jaffray Inc. makes a market in the company's securities. (~)A U.S. Bancorp
Piper Jaffray Inc. officer, director, or other employee is a director
and/or officer of the company. (@)Within the past three years, U.S. Bancorp
Piper Jaffray Inc. was managing underwriter of an offering of, or dealer
manager of a tender offer for, the company's securities or securities of an
affiliate. (*) A registration statement relating to these securities has
been filed with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes effective.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such state. ** These companies have conducted initial public
offerings of their securities and are currently in the "Quiet Period." As a
result, there is no research available on these companies. This
communication shall not constitute an offer to sell or the solicitation of
an offer to buy any securities of these companies. (~)This is not an offer
to sell or a solicitation of an offer to buy these securities. The offering
is made only by the Prospectus, copies of which may be obtained from the
undersigned in any State that lawfully offers these securities. Additional
information is available upon request.

Not FDIC Insured No Bank Guarantee May Lose Value

This material is based on data obtained from sources we deem to be
reliable; it is not guaranteed as to accuracy and does not purport to be
complete. This information is not intended to be used as the primary basis
of investment decisions. Because of individual client requirements, it
should not be construed as advice designed to meet the particular
investment needs of any investor. It is not a representation by us or an
offer or the solicitation of an offer to sell or buy any security. Further,
a security described in this publication may not be eligible for
solicitation in the states in which the client resides. U.S. Bancorp and
its affiliated companies, and their respective officers or employees, or
members of their families, may own the securities mentioned and may
purchase or sell those securities in the open market or otherwise. In the
United Kingdom, this report may only be distributed or passed on to persons
of the kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 (as amended by the
Financial Services Act 1986 (Investment Advertisements) (exemptions) Order
1997). Securities products and services offered through U.S. Bancorp Piper
Jaffray Inc., member of SIPC and NYSE, Inc., a subsidiary of U.S. Bancorp.

Copyright 2001 by U.S. Bancorp Piper Jaffray Inc., 800 Nicollet Mall, Suite
800, Minneapolis, Minnesota 55402-7020.