The B2B Analyst U.S. Bancorp Piper Jaffray's Weekly B2B Newsletter, Volume 2, Number 17

Apr 27, 2001, 01:00 ET from U.S. Bancorp Piper Jaffray Inc.

    MINNEAPOLIS, April 27 /PRNewswire/ --
     Looking for more insight on the B2B e-commerce market?
     -- Each Friday morning Jon and Tim conduct a live interview with
        RadioWallStreet.  To listen live, go to radiowallstreet.com at
        9:00 a.m. PST.  Interview archives are also maintained on the
        RadioWallStreet Web site.
 
     In This Week's B2B Analyst:
     I.    INDEX -- U.S. Bancorp Piper Jaffray B2BEC Index
     II.   The Human Touch -- Human assets are invaluable, but the ability to
           streamline an employee's business processes provides a company with
           even greater efficiency and cost savings.
     III.  MRO Software: Reconciling The Almighty "e" And Its Core To Bring
           Value To The Plant Floor
     IV.   Weekly News
 
     I.   INDEX -- U.S. Bancorp Piper Jaffray B2BEC Index
          Close:                     23.89           Past Week:  -4.02 (-14.4%)
          Year To Date:              44.44  (-65.0%) Past Month: -0.90  (-3.7%)
          Since Inception (7/1/99): -76.11  (-76.1%) Past Year: -93.96 (-79.7%)
 
     II.  The Human Touch
 
     A company's most valuable asset is its people.  While this sounds cliche,
 it is true.  Without people, no business would be able to function.  Moreover,
 within an increasingly service-based economy, people represent the main source
 of differentiation between companies.  However, if an organization's people
 are not well utilized, this source of potential competitive advantage can
 easily be squandered.
     Human resource management is an age-old concept, yet the applications we
 have today tend to serve as data aggregation and organization solutions.  The
 opportunity is now upon us to leverage the information both inside and outside
 the enterprise to drastically increase the productivity, utilization, and job
 satisfaction of employees.
     Corporate interest in these new capabilities has spawned the development
 of numerous software vendors as well as a variety of acronyms to describe the
 market, including ERM (Employee Relationship Management), WRM (Workforce
 Relationship Management), HCM (Human Capital Management), SRM (Services
 Relationship Management), and others.  Among other things, these types of
 software solutions attack areas such as employee development, project
 management, e-recruiting, benefits self-service, compensation management,
 employee utilization, training, and knowledge sharing.
     Let's look at examples of these areas.  Employee utilization applications
 leverage information about each employee's skills and knowledge base, and use
 this information to ensure that people are staffed on projects for which they
 are qualified, and thus most effectively deployed.  Companies such as Niku
 (#@), Portera, Changepoint, and Augeo are going after this space.  Employee
 self-service solutions help to reduce, eliminate, or streamline menial,
 nonvalue-add tasks, allowing employees to spend more time doing what they were
 hired to do. Companies within this area include a mix of ERP players that have
 added on this functionality to their existing applications, such as PeopleSoft
 (#), SAP, and Lawson, as well as newer entrants targeting those areas not
 addressed by the ERP players, such as Workscape, Workbrain, and Plumtree.
 Recruiting and retention packages are aimed directly at attracting and keeping
 the best talent available.  The saying "garbage in, garbage out" rings true
 here, so it is critical that the right hiring decisions are made up-front.
 Companies such as Personic, Icarian, and BrassRing focus on hiring, while
 Kadiri, Callidus, and Incentive Systems provide systems to help properly
 incent and retain employees.
     While PeopleSoft has been slow to move into many of these spaces, Siebel's
 (#) announcement that it is entering the ERM space validates the tremendous
 opportunity that awaits.
     Overall, the focus on the employee is probably second to that of the
 customer.  This area represents a major opportunity for organizational
 improvement.  While many companies have already squeezed significant
 production efficiencies out of their capital assets, the people asset side of
 the equation represents one of the next big areas of corporate focus and
 opportunity, in our view.
 
     III.  MRO Software: Reconciling The Almighty "e" And Its Core To Bring
           Value To The Plant Floor
     This week MRO Software (#) (formerly PSDI), reported its quarterly
 results, handily beating estimates and indicating good progress on its
 transition at stabilizing its business after earlier, less successful efforts
 to dot-com itself.  We believe that this milestone for the Company is
 noteworthy for two reasons.  First, in a broad sense, we believe that its
 recent success is largely grounded in its ability to refocus on its existing
 core business and leverage its e-business capabilities as important supporting
 elements rather than the sole focus.  Specifically, its strength is in asset
 management, where it adds the most value, and to which its e-procurement and
 supplier e-commerce enablement solutions are attractive add-ons.
 Alternatively stated, the dog is once again wagging its tail, as opposed to
 vice-versa.
     The other noteworthy element of MRO Software's results was the indication
 that the plant floor may be warming up to the presence of "e," as in
 electronic/Internet-enabled applications.  While we believe that it is very
 early to start looking for notable adoption of e-commerce in the plant floor,
 we are encouraged by the strong demand for MRO Software's core Maximo product
 that appears to have been at list slightly influenced by the availability of
 e-procurement functionality.  We highlight the early stage, because after the
 Company's stock nearly doubled over the following two days, some investors
 seemed to be anticipating a gold rush (ala was foreseen in the early days of
 the Company's MRO.com initiative).  Some of the other related reasons for our
 cautious optimism and upgrade of the MROI shares from Neutral to Buy include
 the following:
     -- e-Procurement opportunities are beginning to open up as broader
 competitors struggle.  With the recent foundering of broader e-procurement
 vendors, the air of invincibility that precluded MRO Software from tapping
 into the procurement opportunity has begun to crack.  The core issue is the
 distinction in MRO of the "M" and "R" (Maintenance and Repair) from the "O"
 (operational travel and office equipment/supplies).  The traditional leaders
 in e-procurement have focused on the office environment, which is the land of
 "O-" centered procurement, but they have yet to crack the "M" and "R"
 categories, which are rooted in plant uptime; involve inventory management;
 and are driven by event-based purchases revolving around work order-related
 work flows.
     In 2000, roughly $1.4 trillion was spent on MRO goods, 55% was from the
 Maintenance and Repair items and 45% was from Operations.  We continue to
 maintain that MRO Software's legacy as the clear market leader in Enterprise
 Asset Management (EAM) positions it very well to deliver procurement related
 solutions for the "M" and the "R."  As the pre-emptive visionary sales
 processes of the former market gorillas of e-procurement become challenged,
 MRO Software will likely be positioned to benefit.
     -- Potential for viral effect with supplier enablement solutions is very
 strong. Because MRO Software provides both buy- and sell-side solutions for
 MRO procurement, it is positioned to benefit from the viral effect of signing
 up buy-side customers of its sell-side solutions and sell-side suppliers of
 its buy-side customers.  It currently has 8,000 EAM customers who all
 represent potential buy-side customers and it has sold supplier-enablement
 solutions to 13 of the top 20 industrial suppliers.  While still early, the
 Company has seen increased traction due to its ability to provide solutions to
 both sides of the supply chain.
     -- The Company releases the latest version of its supplier-enablement
 tools from its "Pyramid" project.  Replacing previously manual processes and
 cumbersome tools, MRO Software completed development of its latest
 supplier-enablement tools, which will allow small to medium suppliers to
 essentially set up and manage their own online catalog in a completely
 self-service environment.  This new offering should dramatically improve the
 Company's ability to add subscribers for its supplier services.
     The moral of the MRO Software story is to focus on the larger value
 proposition, not the newest value proposition and to position important
 functional enhancements accordingly.  By doing this, MRO Software has gotten
 back on track and is probably now better positioned to serve its plant-based
 customers as it eventually embraces the "e" in its operations and begin a
 second wave of e-procurement.
 
     IV.  WEEKLY NEWS
     -- IBM announced the acquisition of database provider Informix for
        $1 billion in cash.  Informix will be renamed Ascential upon closure of
        the deal.
     -- PeopleSoft reported strong first quarter results, exceeding estimates
        and reiterating 2001 guidance.  The market reacted with glee, boosting
        the Company's stock by 22%.
     -- i2 Technologies (#) has been approved by the General Services
        Administration (GSA), enabling the Company to sell its solutions to the
        public sector.
 
     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.
 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.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X88147344
 
 

SOURCE U.S. Bancorp Piper Jaffray Inc.
    MINNEAPOLIS, April 27 /PRNewswire/ --
     Looking for more insight on the B2B e-commerce market?
     -- Each Friday morning Jon and Tim conduct a live interview with
        RadioWallStreet.  To listen live, go to radiowallstreet.com at
        9:00 a.m. PST.  Interview archives are also maintained on the
        RadioWallStreet Web site.
 
     In This Week's B2B Analyst:
     I.    INDEX -- U.S. Bancorp Piper Jaffray B2BEC Index
     II.   The Human Touch -- Human assets are invaluable, but the ability to
           streamline an employee's business processes provides a company with
           even greater efficiency and cost savings.
     III.  MRO Software: Reconciling The Almighty "e" And Its Core To Bring
           Value To The Plant Floor
     IV.   Weekly News
 
     I.   INDEX -- U.S. Bancorp Piper Jaffray B2BEC Index
          Close:                     23.89           Past Week:  -4.02 (-14.4%)
          Year To Date:              44.44  (-65.0%) Past Month: -0.90  (-3.7%)
          Since Inception (7/1/99): -76.11  (-76.1%) Past Year: -93.96 (-79.7%)
 
     II.  The Human Touch
 
     A company's most valuable asset is its people.  While this sounds cliche,
 it is true.  Without people, no business would be able to function.  Moreover,
 within an increasingly service-based economy, people represent the main source
 of differentiation between companies.  However, if an organization's people
 are not well utilized, this source of potential competitive advantage can
 easily be squandered.
     Human resource management is an age-old concept, yet the applications we
 have today tend to serve as data aggregation and organization solutions.  The
 opportunity is now upon us to leverage the information both inside and outside
 the enterprise to drastically increase the productivity, utilization, and job
 satisfaction of employees.
     Corporate interest in these new capabilities has spawned the development
 of numerous software vendors as well as a variety of acronyms to describe the
 market, including ERM (Employee Relationship Management), WRM (Workforce
 Relationship Management), HCM (Human Capital Management), SRM (Services
 Relationship Management), and others.  Among other things, these types of
 software solutions attack areas such as employee development, project
 management, e-recruiting, benefits self-service, compensation management,
 employee utilization, training, and knowledge sharing.
     Let's look at examples of these areas.  Employee utilization applications
 leverage information about each employee's skills and knowledge base, and use
 this information to ensure that people are staffed on projects for which they
 are qualified, and thus most effectively deployed.  Companies such as Niku
 (#@), Portera, Changepoint, and Augeo are going after this space.  Employee
 self-service solutions help to reduce, eliminate, or streamline menial,
 nonvalue-add tasks, allowing employees to spend more time doing what they were
 hired to do. Companies within this area include a mix of ERP players that have
 added on this functionality to their existing applications, such as PeopleSoft
 (#), SAP, and Lawson, as well as newer entrants targeting those areas not
 addressed by the ERP players, such as Workscape, Workbrain, and Plumtree.
 Recruiting and retention packages are aimed directly at attracting and keeping
 the best talent available.  The saying "garbage in, garbage out" rings true
 here, so it is critical that the right hiring decisions are made up-front.
 Companies such as Personic, Icarian, and BrassRing focus on hiring, while
 Kadiri, Callidus, and Incentive Systems provide systems to help properly
 incent and retain employees.
     While PeopleSoft has been slow to move into many of these spaces, Siebel's
 (#) announcement that it is entering the ERM space validates the tremendous
 opportunity that awaits.
     Overall, the focus on the employee is probably second to that of the
 customer.  This area represents a major opportunity for organizational
 improvement.  While many companies have already squeezed significant
 production efficiencies out of their capital assets, the people asset side of
 the equation represents one of the next big areas of corporate focus and
 opportunity, in our view.
 
     III.  MRO Software: Reconciling The Almighty "e" And Its Core To Bring
           Value To The Plant Floor
     This week MRO Software (#) (formerly PSDI), reported its quarterly
 results, handily beating estimates and indicating good progress on its
 transition at stabilizing its business after earlier, less successful efforts
 to dot-com itself.  We believe that this milestone for the Company is
 noteworthy for two reasons.  First, in a broad sense, we believe that its
 recent success is largely grounded in its ability to refocus on its existing
 core business and leverage its e-business capabilities as important supporting
 elements rather than the sole focus.  Specifically, its strength is in asset
 management, where it adds the most value, and to which its e-procurement and
 supplier e-commerce enablement solutions are attractive add-ons.
 Alternatively stated, the dog is once again wagging its tail, as opposed to
 vice-versa.
     The other noteworthy element of MRO Software's results was the indication
 that the plant floor may be warming up to the presence of "e," as in
 electronic/Internet-enabled applications.  While we believe that it is very
 early to start looking for notable adoption of e-commerce in the plant floor,
 we are encouraged by the strong demand for MRO Software's core Maximo product
 that appears to have been at list slightly influenced by the availability of
 e-procurement functionality.  We highlight the early stage, because after the
 Company's stock nearly doubled over the following two days, some investors
 seemed to be anticipating a gold rush (ala was foreseen in the early days of
 the Company's MRO.com initiative).  Some of the other related reasons for our
 cautious optimism and upgrade of the MROI shares from Neutral to Buy include
 the following:
     -- e-Procurement opportunities are beginning to open up as broader
 competitors struggle.  With the recent foundering of broader e-procurement
 vendors, the air of invincibility that precluded MRO Software from tapping
 into the procurement opportunity has begun to crack.  The core issue is the
 distinction in MRO of the "M" and "R" (Maintenance and Repair) from the "O"
 (operational travel and office equipment/supplies).  The traditional leaders
 in e-procurement have focused on the office environment, which is the land of
 "O-" centered procurement, but they have yet to crack the "M" and "R"
 categories, which are rooted in plant uptime; involve inventory management;
 and are driven by event-based purchases revolving around work order-related
 work flows.
     In 2000, roughly $1.4 trillion was spent on MRO goods, 55% was from the
 Maintenance and Repair items and 45% was from Operations.  We continue to
 maintain that MRO Software's legacy as the clear market leader in Enterprise
 Asset Management (EAM) positions it very well to deliver procurement related
 solutions for the "M" and the "R."  As the pre-emptive visionary sales
 processes of the former market gorillas of e-procurement become challenged,
 MRO Software will likely be positioned to benefit.
     -- Potential for viral effect with supplier enablement solutions is very
 strong. Because MRO Software provides both buy- and sell-side solutions for
 MRO procurement, it is positioned to benefit from the viral effect of signing
 up buy-side customers of its sell-side solutions and sell-side suppliers of
 its buy-side customers.  It currently has 8,000 EAM customers who all
 represent potential buy-side customers and it has sold supplier-enablement
 solutions to 13 of the top 20 industrial suppliers.  While still early, the
 Company has seen increased traction due to its ability to provide solutions to
 both sides of the supply chain.
     -- The Company releases the latest version of its supplier-enablement
 tools from its "Pyramid" project.  Replacing previously manual processes and
 cumbersome tools, MRO Software completed development of its latest
 supplier-enablement tools, which will allow small to medium suppliers to
 essentially set up and manage their own online catalog in a completely
 self-service environment.  This new offering should dramatically improve the
 Company's ability to add subscribers for its supplier services.
     The moral of the MRO Software story is to focus on the larger value
 proposition, not the newest value proposition and to position important
 functional enhancements accordingly.  By doing this, MRO Software has gotten
 back on track and is probably now better positioned to serve its plant-based
 customers as it eventually embraces the "e" in its operations and begin a
 second wave of e-procurement.
 
     IV.  WEEKLY NEWS
     -- IBM announced the acquisition of database provider Informix for
        $1 billion in cash.  Informix will be renamed Ascential upon closure of
        the deal.
     -- PeopleSoft reported strong first quarter results, exceeding estimates
        and reiterating 2001 guidance.  The market reacted with glee, boosting
        the Company's stock by 22%.
     -- i2 Technologies (#) has been approved by the General Services
        Administration (GSA), enabling the Company to sell its solutions to the
        public sector.
 
     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.
 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.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X88147344
 
 SOURCE  U.S. Bancorp Piper Jaffray Inc.

RELATED LINKS

http://www.fbs.com